Aussie dollar falls below US$0.66
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Daily Currency Update
The Australian dollar is weaker this morning when valued against the Greenback currently trading at 0.6548 at the time of writing. The Aussie dollar is trading lower on Friday, extending Thursday’s sell-off into the weekend. The AUD/USD pair is feeling pressure from negative Chinese housing and lending data which indicates the property sector of the world’s second largest economy is still in the eye of the storm. China’s struggling real estate developers won’t be getting a major bailout, Chinese authorities have indicated, warning that those who “harm the interests of the masses” will be punished. Authorities have since announced measures to provide some developers with financing. But the national stance on reducing the role of real estate in the economy hasn’t changed. Real estate was once about 25% of China’s GDP when including related sectors such as construction. UBS analysts estimated late last year that property now accounts for about 22% of the economy. The Chinese House Price Index showed a decline in house prices of minus 1.4% in February from minus 0.7% in the previous month of January, according to data from the National Bureau of Statistics of China, released early Friday. This continues the down trend in Chinese house prices since 2019.Looking ahead this week all eyes will be on Tuesday's Reserve Bank of Australia (RBA) interest rate announcement. The market is expecting the RBA to leave rates on hold for another month at 4.35% where it has been for five months. It will spare millions of home owners a further mortgage bill squeeze amid near-record levels of mortgage stress risk and increasing rates of overdue repayments in recent months. Economists say interest rates are unlikely to increase further, with the next move set to be down, potentially later this year or at some stage in 2025, as inflation continues to ease. On Thursday the Australian Bureau of Statistics will release the unemployment figures for the month which is predicted to see the jobless rate decrease from 4.1% to 4%.
Key Movers
Last week the number of Americans filing new claims for unemployment benefits fell last week, pointing to moderate job growth despite slowing economic activity. Initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 345,000 last week. Although claims have been volatile in recent weeks, there is little in the numbers to suggest a shift in the moderate pace of job gains, even as the broader economy is struggling under the weight of higher taxes and deep government spending cuts.The Dow Jones Industrial Average (DJIA) is down around half a percent as markets round the corner into the Friday closing bell with US equities broadly lower on the day. An extended pullback in the tech and telecoms sectors are dragging down the averages. From the technical point of view, Dow Jones is moving towards the nearest support at 38,500 – 38,550. A successful test of this level will open the way to the test of the next support at 38,100 – 38,150. The SP500 is losing ground as traders react to the economic reports. NY Empire State Manufacturing Index declined from -2.4 in February to -20.9 in March, compared to analyst consensus of -7. Industrial Production increased by 0.1% in February. The final reading of the Michigan Consumer Sentiment report indicated that Consumer Sentiment pulled back from 76.9 in February to 76.5 in March. Treasury yields continued to move higher as bond traders focused on the recent CPI and PPI reports, which showed that inflation was not under control.
Expected Ranges
- AUD/USD: 0.6450 - 0.6650 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9250 - 1.9450 ▲
- AUD/NZD: 1.0650 - 1.0850 ▲
- AUD/CAD: 0.8750 - 0.8950 ▼