Aussie dollar continues to trade above US$0.66
Written by
Daily Currency Update
The Australian dollar is stronger this morning when valued against the Greenback, currently trading at US$0.6630 at time of writing. The AUD/USD extended its rally toward a daily high of US$0.6664, while US Treasury bond yields edged lower.The US 10-year benchmark note rate is down to 4.044%, the lowest level since February 2. If buyers were to extend the rally toward US$0.6700, the door for testing the January 5 high at US$0.6747 could open, before challenging the US$0.6800 mark. On the other hand, a pullback below the January 5 low of US$0.6640 could exacerbate a test of the US$0.6600 figure.
Last week Australia's economy grew by 0.2% in the December quarter, the smallest increase in more than a year, but one that pushed the nation to nine successive quarters of growth.
New data from the Australian Bureau of Statistics (ABS) revealed GDP growth was largely steady from September's 0.3% rise, with Treasurer Jim Chalmers labelling it "a little but not a lot" while pointing out it is still far better than some other advanced economies. Annual GDP increase reached 1.5%, but population growth meant per-capita GDP fell by 1% over the last 12 months.
Looking ahead this week, the only scheduled release is the NAB Business Confidence Survey on Tuesday which asks about 350 businesses to rate the relative level of current business conditions.
Key Movers
In the US on Friday the survey of establishments showed that Nonfarm payrolls increased by 275,000 jobs last month, and the economy created 167,000 fewer jobs in December and January than previously estimated. Economists polled by Reuters had forecast 200,000 jobs added in February, with estimates ranging from 125,000 to 286,000. Payrolls are more than double the roughly 100,000 jobs needed per month to keep up with growth in the working-age population.U.S. job growth accelerated in February, but that likely masks underlying softening labour market conditions as the unemployment rate increased to 3.9%, a two-year high. The Labor Department's closely watched employment report on Friday also showed that wages rose moderately last month.
The jump in the unemployment rate after holding at 3.7% for three straight months reflected a further decline in household employment. The mixed report boosted the odds of the Federal Reserve cutting interest rates by June. Financial markets saw an 80% chance of a first-rate cut by June, up from 75%, before the report was released.
Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. Fed Chair Jerome Powell told lawmakers this week that rate cuts would "likely be appropriate" later this year, but emphasized they "really will depend on the path of the economy."
Expected Ranges
- AUD/USD: 0.6530 - 0.6730 ▲
- AUD/EUR: 0.5930 - 0.6130 ▲
- GBP/AUD: 1.9300 - 1.9500 ▼
- AUD/NZD: 1.0630 - 1.0830 ▲
- AUD/CAD: 0.8850 - 0.9050 ▲