Aussie dollar trades below 67 US cents
Monday 22 May, 2023
Daily Currency UpdateThe Australian dollar is slightly stronger this morning when valued against the Greenback. The AUD/USD pair gained strong traction on Friday moving away from a near three-week low, around the 0.6600 round-figure mark touched on Thursday. The Aussie dollar held on to its intraday gains through the early North American session and is currently placed around the 0.6655-0.6660 region, just a few pips below the daily high. Meanwhile last week China’s economic recovery lost momentum after an initial burst in consumer and business activity early in the year, prompting calls for more policy stimulus to bolster growth. Industrial production rose 5.6% from a year earlier, much lower than the 10.9% median estimate in a Bloomberg survey of economists. Retail sales climbed 18.4%, helped by a low base of comparison from last year, although still missing expectations. The record youth jobless rate of 20.4% in April showed the economy was still struggling to absorb new workers, even as the overall labour force declined. The youth unemployment rate rose from 19.6% and topped last summer’s previous record of 19.9%, even as the overall surveyed jobless rate declined to 5.2%, according to the NBS.
Looking ahead this week and we will continue to review the outcomes from the recent G7 nations meetings. G7 meetings are attended by finance ministers and central bankers from seven industrialised nations from Canada, Italy, France, Germany, Japan, the UK, and the US. While it's not an institution, the G7 is an influential global policy-making body operating at the highest level, and their initiatives and policies can have a substantial impact on currency markets. On Tuesday we will see the release of the Purchasing Managers' Index (PMI), a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Friday the Australian Bureau of Statistics will release the monthly Retail Sales figures, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Key MoversWall Street’s best week since March ran out of steam on Friday as worries rose about the US government’s efforts to avoid a potentially disastrous default on its debt. The S&P 500 slipped 0.1%, the Dow Jones fell 0.3%, while the Nasdaq gave up 2%. Despite its weak Friday, the S&P 500 still managed to break out of a long, listless stretch where it failed to move by 1%, up or down, for six straight weeks. It gained 1.6%, with much of the strength earlier in the week coming on rising hopes that Washington can avoid a debt default. Democrats and Republicans are facing down a June 1 deadline, which is when the US government could run out of cash to pay its bills, unless Congress allows it to borrow more. A default on its debt would likely mean a recession for the economy, which has economists and investors both widely expecting a deal to be made.
- AUD/USD: 0.6550 - 0.6750 ▲
- AUD/EUR: 0.6050 - 0.6250 ▲
- GBP/AUD: 1.8600 - 1.8800 ▼
- AUD/NZD: 1.0500 - 1.0700 ▼
- AUD/CAD: 0.8850 - 0.9050 ▲