Aussie dollar relatively unchanged below US$0.66
Written by
Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback trading at 0.6574 at the time of writing. The Aussie dollar finished Friday’s session on the back foot, down more than 0.15%, for a total of 0.33% losses in the week. At the time of writing, the pair ended at 0.6564, failing to stay above the 0.6600 figure. Australia's dollar reacted positively to the favorable performance of copper and iron. Additionally, the Aussie dollar received some support from the recent news mentioning additional stimulus measures by the People's Bank of China (PBoC). However, the Reserve Bank of Australia (RBA) is still expected to reduce borrowing costs later this year. Changes to the stage three tax cut package might introduce a slight delay in the timeline for the first rate cut, potentially pushing it back by a couple of months. Looking ahead this week on the Australian dollar front, investors await the Q4 Consumer Price Index (CPI) data, which will be released next week. Price pressures are anticipated to soften significantly to 4.3% from 5.4% reading in the July-September quarter, which will provide some relief to Reserve Bank of Australia (RBA) policymakers.Key Movers
In the US on Friday all important inflation gauges showed that the rate of price increases cooled as 2023 came to a close. The Commerce Department’s personal consumption expenditures price index for December, an important gauge for the Federal Reserve, increased 0.2% on the month and was up 2.9% on a yearly basis, excluding food and energy. Economists surveyed by Dow Jones had been looking for respective increases of 0.2% and 3%. On a monthly basis, core inflation increased from 0.1% in November. However, the annual rate declined from 3.2%. The 12-month rate is the lowest since March 2021. Including volatile food and energy costs, headline inflation also rose 0.2% for the month and held steady at 2.6% annually. The Fed’s benchmark overnight interest rate is currently targeted between 5.25%-5.5. US equities closed mixed on Friday to cap off a week of stunning record closes. The Dow Jones Industrial Average (DJIA) gained 60 points to close up 0.16% at $38,109.43 while the Standard & Poor’s 500 (S&P) Major equity index closed down 0.07%, shedding a little over 3 points and ending Friday at $4,890.97. The NASDAQ Composite declined on tech stock hesitancy, losing 55 points and closing down by a third of a percent at $15,455.36.Expected Ranges
- AUD/USD: 0.6465 - 0.6665 ▼
- AUD/EUR: 0.5950 - 0.6150 ▼
- GBP/AUD: 1.9130 - 1.9330 ▲
- AUD/NZD: 1.0600 - 1.0800 ▲
- AUD/CAD: 0.8700 - 0.8900 ▼