Home Daily Commentaries Aussie dollar trades above US$0.65

Aussie dollar trades above US$0.65

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Monday 4 March, 2024

Daily Currency Update

The Australian dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.6505 at the time of writing. The AUD/USD pair moved higher on Friday from 0.6490 as investors hope the Federal Reserve will start reducing interest rates from the June policy meeting. Friday’s market attention gravitated towards China’s economic performance, with the release of February’s private sector PMIs highlighting the country’s economic dynamics. The Caixin Manufacturing PMI, which often garners more attention, indicated a modest increase to 50.9 from 50.8, surpassing the anticipated decline to 50.6. This data paints a nuanced picture of China’s manufacturing sector, with production reaching its highest rate since May 2023, a resurgence in new export orders for a second consecutive month, and a strategic increase in purchasing activities by firms in light of improved demand.
Looking ahead this week and today we will see the release of the monthly ANZ Job Advertisements and Building Approvals. On Tuesday the Australian Bureau of Statistics will release the current account figures which are directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country. On Wednesday we will see the release of the quarterly Gross Domestic Product (GDP) figures with market forecasts expecting a small increase of 0.3% up from the previous quarter 0.2%. Finally, on Friday we will see the release of the monthly Goods Trade Balance.

Key Movers

In the US on Friday the Manufacturing PMI registered 47.8 percent in February, down 1.3 percentage points from the 49.1 percent recorded in January. The overall economy continued in expansion for the 46th month after one month of contraction in April 2020. (A Manufacturing PMI above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index moved back into contraction territory at 49.2 percent, 3.3 percentage points lower than the 52.5 percent recorded in January.
Looking ahead this week Federal Reserve Chairman Jerome Powell will appear before Congress both on Wednesday and Thursday for his semiannual testimony. Investors usually focus on the Q&A session with lawmakers, where the Fed chief will be grilled on the economic outlook. However, all eyes will be on Friday when the latest US employment report hits the markets. Economists expect another round of solid job numbers, which would reaffirm that the labor market remains in good shape. Some early indicators pointed to a slowdown in employment growth in February.

Expected Ranges

  • AUD/USD: 0.6400 - 0.6600 ▼
  • AUD/EUR: 0.5900 - 0.6100 ▼
  • GBP/AUD: 1.9200 - 1.9400 ▲
  • AUD/NZD: 1.0500 - 1.0700 ▼
  • AUD/CAD: 0.8700 - 0.8900 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.