Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback. Last week we saw the Aussie dollar fall from its late December high, but has bounced off technical support at 0.6525. The focal point now is on whether the pair can close above the range of 0.6570-0.6580 on a weekly basis. If it does, a potential rally toward 0.6650 and subsequently 0.6700 may be on the horizon. The expected trading range for today is between 0.6550 support and 0.6640 resistance. The AUD/USD pair is currently trading at 0.6564 at the time of writing. Looking ahead on the data front this week and there are no scheduled releases today. On Tuesday we will see the release of the National Australia Bank (NAB) Business Confidence Survey. A survey of about 350 businesses asks respondents to rate the relative level of current business conditions. On Wednesday we will see the release of the Purchasing Managers' Index (PMI) a leading indicator of economic health, businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy. Finally, on Thursday the Reserve Bank of Australia (RBA) will release the RBA Bulletin contains relevant articles, speeches, and statistical tables, and provides a detailed analysis of current and future economic conditions from the bank's viewpoint. Tends to have a mild impact since much of the information is released previously.
Key Movers
The Greenback closed the week slightly stronger against a basket of currencies off the back of stronger than expected University of Michigan (UoM) data which is keeping the USD afloat, but steady dovish bets on the Federal Reserve (Fed) limit any upward potential. The US economy appears overheated although the chances of interest rate cuts in March and May lingers at around 50%. Thus, the Greenback remains in fluctuating currents, affected by both resilient economic performance and dovish bets on the Fed's next move. Fed officials have been pushing back against market expectations of an increased pace of rate cuts from the US central bank, and markets appear to finally be listening as US economic data continues to thump market forecasts, printing consistently higher and healthier than investors were hoping for as markets yearn for cheaper lending and borrowing costs. US Consumer Sentiment improved to its best reading since July of 2021 according to the University of Michigan’s consumer sentiment survey. The UoM’s 5-year Consumer Inflation Expectations Survey in January also declined to familiar lows at 2.8% from December’s 2.9%. The Standard & Poor’s drove to a new all-time high of $4,839.58 on Friday as equities broadly rallied as investors piled into future earnings bets on large-cap tech stocks, with chip-makers loosely associated with AI tech projects leading the charge.
Expected Ranges
- AUD/USD: 0.6470 - 0.6670 ▼
- AUD/EUR: 0.5925 - 0.6125 ▼
- GBP/AUD: 1.9040 - 1.9240 ▲
- AUD/NZD: 1.0600 - 1.0800 ▲
- AUD/CAD: 0.8700 - 0.8900 ▼