Aussie dollar continues to trade below US$0.66
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback currently trading at US$0.6531 at the time of writing. The AUD/USD pair faces an intense sell-off as downbeat market sentiment has weakened the appeal of risk-perceived assets. The Aussie dollar falls to the psychological support of US$0.6500. Yesterday the Reserve Bank left interest rates on hold amid signs that growth in the economy has dramatically slowed down following 13 interest rate rises since May 2022. The cash rate remains at 4.35 per cent, and while the central bank gave no clear indication of where it was headed next, saying it was "not ruling anything in or out", many economists are predicting the RBA will wait for further signs inflation has slowed before it starts cutting interest rates in the second half of this year. Some have pushed out their forecasts for rate cuts to November, while others still see a rate cut possible earlier in the year. Looking ahead for the rest of the week 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
The US economic data in recent weeks indicated that the US economy is strong and inflation remains elevated. Markets expect the Fed to leave interest rates unchanged for a fifth straight time at the end of its two-day meeting on Wednesday. The Fed kicked off its flurry of rate hikes in March 2022 as inflation soared during the pandemic, reaching a 40-year high in June of that year. Although inflation has rapidly cooled since then, it remains higher than the Fed would like, which is why economists believe the central bank will keep rates steady this week. The Federal Reserve's Open Market Committee meets on March 19-20. The rate-setting panel will announce its rate decision at 2 p.m. Eastern time on March 20. Chairman Jerome Powell will hold a press conference at 2:30 p.m. on Wednesday to discuss the Federal Open Market Committee's rate decision and provide information on the central bank's outlook.Yesterday Japan's central bank raised the cost of borrowing for the first time in 17 years. The Bank of Japan (BOJ) increased its key interest rate from -0.1% to a range of 0%-0.1%. It comes as wages have jumped after consumer prices rose. In a statement announcing the decision, the BOJ said it will keep buying "broadly the same amount" of government bonds as before and ramp up purchases in case yields rise rapidly. Expectations that the BOJ would finally raise rates had been growing since Governor Kazuo Ueda took office in April last year. The latest official figures showed that even though the rate of price rises has been slowing, Japan's core consumer inflation held at the bank's 2% target in January.
Expected Ranges
- AUD/USD: 0.6430 - 0.6630 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9350 - 1.9550 ▲
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.8760 - 0.8960 ▼