Aussie dollar trades below US$0.67
Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback. The Aussie dollar gained slightly against the US dollar (USD) on Friday, shrugging off risk aversion along with softer-than-expected economic data from the United States. The AUD/USD pair closed the week at 0.6696, up by 0.06%. During the last six days, the AUD/USD has been trading within familiar levels, unable to decisively crack the 0.6640/0.6740 range. Keep in mind that the Australian dollar is highly sensitive to global growth, commodities, and of course, the US dollar, which is considered to be a safety currency. The AUD/USD pair is currently trading at 0.6665 at the time of writing.Looking ahead this week on the data front and all eyes will be on the World Economic Forum (WEF). WEF annual meetings are held in Davos and attended by central bankers, prime ministers, finance ministers, trade ministers, and business leaders from over 90 countries. Most meetings are open to the press and officials usually talk with reporters throughout the day. Comments from central bankers and other influential officials can create significant market volatility. Locally on Monday, we will see the release of Australia and New Zealand Banking Group (ANZ) monthly Job Advertisements. On Tuesday we will see the release of the Westpac Consumer Sentiment which is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. Key release this week will be on Thursday when the Australian Bureau of Statistics releases the latest monthly Unemployment data which should see the jobless rate remain steady at 3.9%.
Key Movers
The US dollar gave up its early gains on the back of Friday's weaker than expected PPI readings for December with the decline in short term yields prompting a decent move higher across the board. U.S. producer prices unexpectedly fell in December amid declining costs for goods such as diesel fuel and food, suggesting inflation would continue to subside and allow the Federal Reserve to start cutting interest rates this year. The report from the Labor Department on Friday, which also showed prices for services were unchanged for the third straight month, implied that a pick-up in consumer prices last month was likely a blip. It led economists to anticipate that the key price measures tracked by the U.S. central bank for its 2% inflation target rose moderately in December from the prior month. The producer price index for final demand dipped 0.1% last month, the Labor Department's Bureau of Labor Statistics said. Data for November was revised to show the PPI falling 0.1% instead of being unchanged as previously reported. The PPI has now declined for three consecutive months.In the UK Britain's economy grew slightly more strongly than expected in November but remains at risk of slipping into a mild recession, a potential blow for Prime Minister Rishi Sunak before an election expected in 2024. Gross domestic product (GDP) expanded by 0.3% after a fall of 0.3% in October. Sterling was little changed against the U.S. dollar after the data, but government bond yields fell as markets priced in a slightly higher chance that the Bank of England (BoE) will begin to cut interest rates in May. Britain's economy struggled to gain momentum in 2023, as households were squeezed by rapid inflation and the highest BoE interest rates in 15 years.
Expected Ranges
- AUD/USD: 0.6550 - 0.6750 ▲
- AUD/EUR: 0.6000 - 0.6200 ▲
- GBP/AUD: 1.8850 - 1.9050 ▼
- AUD/NZD: 1.0550 - 1.0750 ▼
- AUD/CAD: 0.8800 - 0.9000 ▲