Aussie dollar trades below 66 US cents
Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar experienced a dip in its Friday trading session, with the AUD/USD trading lower at approximately 0.6550. The downward movement can primarily be attributed to robust American labor market data, coupled with escalating U.S. yields, which drove demand for the Greenback. From a technical perspective, resistance for the Aussie dollar remains at 0.6590. On the downside, the pair might find support ahead of 0.6520.Last week the Australian borrowers were spared a pre-Christmas interest rate rise with the Reserve Bank remaining on hold at its final board meeting of 2023. The RBA left its cash rate at 4.35%, a move widely expected by financial markets and economists after the inflation rate resumed its slowdown in October to 4.9% and the jobless rate ticked higher. The central bank lifted the cash rate by 25 basis points in November to a 12-year high, stating it wanted to ensure inflation continued to ease towards its target range of 2%-3% by the end of 2025. Looking ahead to this week and on Tuesday we will see the release of both Westpac Consumer Sentiment and NAB Business Confidence. On Thursday the Australian Bureau of Statistics will release the latest employment figures which is expected to see the jobless rate rise to 3.8% from 3.7%. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.
Key Movers
In the United States on Friday an increase in US Jobless claims, adding to evidence that the US labor market is loosening and increasing hopes that the Fed might start cutting rates next March. The US Bureau of Labor Statistics data indicated that the November Average Hourly Earnings increased by 0.4% MoM, higher than the 0.3% expected and the previous 0.2%. Moreover, US Nonfarm Payrolls surprisingly jumped to 199K in November from the former 150K, surpassing the forecast of 180K, while the Unemployment rate declined to 3.7% from 3.9%. The week-ahead economic calendar will be packed with high-impact events for the U.S. dollar, but the most important ones that may help define its near-term path will be the November U.S. consumer price index report to be released on Tuesday morning and the Federal Reserve’s monetary policy announcement scheduled for Wednesday afternoon. Over the past month, the Fed’s interest rate outlook has shifted in a dovish direction, with markets pricing in about 100 basis points of easing over the next 12 months. Although recent data, such as last month's employment numbers, have been strong and inconsistent with an economy in urgent need of central bank support, traders have held firm in their belief that aggressive cuts are just around the corner.Expected Ranges
- AUD/USD: 0.6450 - 0.6650 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.8850 - 1.9050 ▲
- AUD/NZD: 1.0550 - 1.0750 ▼
- AUD/CAD: 0.8800 - 0.9000 ▲