AUD firms on risk-on sentiment and commodity strength
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Daily Currency Update
This week, the Australian dollar (AUD) experienced notable volatility, influenced by domestic monetary policy decisions and global economic developments. The AUD/USD exchange rate began the week on a downward trend, dipping to a low of 0.6490 on July 7. This decline was attributed to market concerns over potential interest rate cuts by the Reserve Bank of Australia (RBA) and rising global trade tensions. On July 9, the AUD/USD exchange rate closed at 0.64985, down from 0.65309 on July 8. This dip in the AUD occurred amid a backdrop of global economic uncertainty and a fluctuating U.S. economy. Overnight, the AUD experienced a modest gain against the USD. The AUD/USD exchange rate rose to 0.6545, marking a 0.13% increase from the previous session. This uptick reflects a continuation of the AUD's recent strengthening trend, though it remains down by 3.33% over the last 12 months. Looking ahead, the AUD's performance will likely continue to be influenced by the RBA's monetary policy decisions and global economic developments. Analysts expect the RBA to consider further rate cuts in the coming months, which could impact the AUD's trajectory.Key Movers
This week, the USD experienced a modest rebound against major currencies, though it remains under pressure due to ongoing economic and political uncertainties. The DXY, which measures the USD against a basket of major currencies, opened the week at 96.77 and closed at 97.76 on July 10, reflecting a 0.98% weekly gain. While the USD showed resilience this week, it remains vulnerable to ongoing trade tensions and potential shifts in Federal Reserve policy. Investors will be closely monitoring upcoming economic data and geopolitical developments for further direction.In the week ending July 4, U.S. initial jobless claims unexpectedly declined by 5,000 to a seasonally adjusted 227,000, falling below economists' expectations of 235,000. This marks the lowest level in seven weeks, suggesting continued resilience in the labor market despite broader economic uncertainties. Continuing claims, which reflect the number of individuals receiving unemployment benefits after an initial claim, increased by 10,000 to 1.965 million—the highest level since November 2021. This rise indicates that while fewer individuals are newly unemployed, those who are jobless are experiencing longer durations of unemployment.
As of the market close on July 10, the S&P 500 index reached a new record high, closing at 6,280.46, up 0.3% for the day. This marked the second consecutive day of gains, driven by strong performances in sectors like airlines and technology. Delta Air Lines surged 12% following an upbeat earnings forecast, while WK Kellogg jumped 30.6% amid acquisition news. Overall, the S&P 500's performance this week reflects investor optimism, particularly in sectors poised for growth, while also highlighting the need for caution amid potential market headwinds.
Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▲
- AUD/EUR: 0.5500 - 0.5700 ▲
- GBP/AUD: 2.0500 - 2.0700 ▼
- AUD/NZD: 1.0800 - 1.1000 ▲
- AUD/CAD: 0.8900 - 0.9000 ▲