Home Daily Commentaries AUD tests break above US$0.63 amid broadly weaker USD

AUD tests break above US$0.63 amid broadly weaker USD

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 12 February, 2025

Daily Currency Update

The Australian dollar edged higher through trade on Tuesday, capitalising on a broader USD softening. With little of note on the macro-economic agenda and no new tariff headlines markets continued to unwind dollar gains won following Trump's promise of a 25% tariff on steel and aluminium. The AUD pushed toward US$0.63 testing a break and marking intraday highs at US$0.6302 before retreating toward a narrow range between US$0.6290 and US$0.63.

Our attention today turns to domestic home lending data, a potential key marker in housing performance leading into next week's RBA policy update. With many now pricing in a rate cut, we are keenly attuned to any dataset that may afford policy markers scope to maintain the current policy setting. US CPI data for January dominates the offshore ticket while tariff headlines continue to guide a broader direction.

Key Movers

Price action across majors was largely muted through trade on Tuesday with no new tariff news and little reaction to commentary from Fed Chair Jerome Powell. The US dollar fell against most trading partners and is now back below its Friday close, giving up all gains won following Trump's announcement of a 25% tariff on steel and aluminium. With markets holding onto hopes that a large portion of the US tariff may yet be negotiated away the US dollar has struggled to extend upside runs on tariff headlines. That said it remains above the high seen after US non-farm payrolls and is underpinned by adding expectations for extensive US rate cuts through 2025. With the USD on the back foot, the euro climbed back through US$1.0350, while the pound pushed back above US$1.24. The yen was the day's big underperformer giving up ¥152 and allowing the USD to push back above ¥152.50.

Our attention today remains on tariff headlines as US CPI inflation data for January dominates the marco ticket.

Expected Ranges

  • AUD/USD: 0.6100 - 0.6350 ▲
  • AUD/EUR: 0.5980 - 0.6080 ▼
  • GBP/AUD: 1.9600 - 0.99 ▲
  • AUD/NZD: 1.1080 - 1.1150 ▲
  • AUD/CAD: 0.8920 - 0.9020 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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