Daily Currency Update
AUD - Australian DollarThe Australian Dollar saw mixed fortunes on Wednesday as investors focused on last nights FOMC meeting. Opening the morning at 0.6875, the AUD/USD declined to intraday lows of 0.6855 as the local currency continued to trade in a bearish tone following dovish tones from the RBA on Tuesday.Losses were erased overnight as the greenback was sold off in droves as Federal Reserve Chairman cited economic uncertainties in the future for the world’s largest economy. As interest rates remained on hold in the United States, dovish remarks by the Fed Chairman saw the Aussie push through 69 US cents for the first time in a week. Further direction for the local currency will be largely dependent on RBA Governor Philip Lowe’s speech at a luncheon today in Adelaide. Investors will be keen to find out any new remarks about the state of the labour market following the dovish monetary policy meeting minutes released this week.From a technical perspective, the AUD/USD pair is currently trading at 0.6884. We continue to expect support to hold on moves approaching 68 US cents while now any upward push will likely meet resistance at 0.6920
Key Movers
US Dollar momentum stalled overnight despite the Federal Reserve deciding to hold rates in June’s monetary policy meeting at 2.25-2.5%. The FOMC has indicated that it is ready to cut rates in the future if necessary as signs of a slowing economy continues. The US Dollar Index (DXY) declined 0.43% for the day coming off highs of 97.77 to open this morning at 97.22. Market expectations based on the CME FedWatch tool have now moved to a 70% chance of a rate cut in on July 31st at next months meeting.One of the best performers overnight was the Great British Pound as inflation came in at expectations of 2% for the month of May. Cable rallied from 1.2550 to overnight highs of 1.2650, seeing short term relief as political uncertainty continues to drag the Pound lower.Central banks globally continue to be a major focus this week as both the BOJ and Bank of England meet on Thursday to announce their policy decisions. There are no expectations of any surprise moves as both central banks are expected to keep rates on hold at current levels.
Expected Ranges
- AUD/USD: 0.6800 - 0.6920 ▲
- GBP/AUD: 1.8200 - 1.8600 ▲
- AUD/NZD: 1.0500 - 1.0600 ▲
- AUD/EUR: 0.6080 - 0.6160 ▼
- AUD/CAD: 0.9100 - 0.9200 ▼