Aussie dollar continues to trade above US$0.65
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Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback, currently trading at US$0.6538 at the time of writing. Yesterday, The Aussie dollar bounced off last Friday’s low of US$0.6508 and is climbing but faces a key resistance level at US$0.6550. The Australian dollar receives upward momentum as the ASX 200 Index extends its winning streak, led by gains in the mining and energy sectors.Additionally, the Aussie dollar is bolstered by a stronger Chinese yuan (CNY), with the People's Bank of China (PBoC) setting the mid-rate for the onshore yuan significantly higher than expected. Looking ahead today, we will see the Westpac Consumer Sentiment a survey of about 1,200 consumers that asks respondents to rate the relative level of past and future economic conditions, employment and climate for major purchases.
On Wednesday, all eyes will be on the Australian Bureau of Statistics monthly release of Consumer Price Index (CPI) which is expected to rise from 3.4% to 3.5%. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Finally, on Thursday we will see the release of the monthly Retail Sales figures.
Key Movers
Overnight the Pound sterling had a mild recovery against the Greenback in the mid-North American session, as the Greenback remains offered amid speculations the Federal Reserve (Fed) would cut rates in June. At its March meeting last week, the Fed held the benchmark rate to the 5.25%-5.5% range.After that meeting, Fed Chairman Jerome Powell emphasized that policymakers are likely to cut interest rates later this year. Still, only once they have greater confidence that inflation is moving toward its 2% target. At the time of writing, the GBP/USD trades at 1.2635. gains 0.32%.
On the data front, US housing data was weaker than expected as New Home Sales slumped 0.3%, with sales coming at 0.662 million, below estimates of 0.675 million and January’s 0.664 million. Elsewhere, the Chicago Fed announced the National Activity Index saw improvement, moving from -0.54 to 0.05, with positive developments across all four index categories. The tiny decline registered was likely owed to an uptick in mortgage rates during the month.
According to Freddie Mac, the average 30-year mortgage rate rose to 6.8% in February, from 6.6% the month prior. Moving forward, a structural shortfall of available single-family homes and home builders' ability to bridge the affordability gap with price incentives, should continue as tailwinds and support an improving sales pace this year.
Expected Ranges
- AUD/USD: 0.6440 - 0.6640 ▲
- AUD/EUR: 0.5930 - 0.6130 ▲
- GBP/AUD: 1.9200 - 1.9400 ▼
- AUD/NZD: 1.0800 - 1.1000 ▲
- AUD/CAD: 0.8800 - 0.9000 ▲