Aussie dollar continues to trade above US$0.69
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Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback, currently trading at US$0.6909 at the time of writing. The AUD/USD holds gains above the key level of US$0.69 in Monday’s European session. The Aussie asset strengthens as the Australian dollar performs strongly on announcing China’s fiscal support to revive its economic prospects. The AUD remains stronger, despite the mixed Manufacturing Purchasing Managers’ Index (PMI) data from China, Australia’s largest trading partner. China's Caixin Manufacturing PMI fell to 49.3 in September, indicating contraction, down from 50.4 in August.Meanwhile, China’s NBS Manufacturing PMI improved to 49.8, up from 49.1, in the previous month and surpassing the market consensus of 49.5. Looking ahead today, the Australian Bureau of Statistics will release the latest monthly retail sales figures along with the monthly Building Approvals.
On Thursday, we will see the release of the Goods Trade Balance. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.
Key Movers
US Inflation is moving in the right direction and Friday’s Core PCE Price Index, the Fed’s preferred inflation indicator, was within expectations. The index rose just 0.1% MoM in August, a three-month low. This was down from 0.2% in July and below the market estimate of 0.2%. Yearly, Core PCE ticked up to 2.7%, after three consecutive months at 2.6%, which is in line with expectations. The Dow Jones Industrial Average was hamstrung at the start of a fresh trading week.The major equity index eased slightly on Monday but stayed close to the 42,000 level. Stock traders are eyeing data risks and rate markets are grappling with the odds of a follow-up cut from the Federal Reserve (Fed) in November. Prices of Gold came under further pressure and added to Friday’s losses near the $2,630 region per ounce troy. In the same direction, Silver prices dropped to four-day lows and revisited the sub-$31.00 region per ounce.
Market focus will be slowly swinging around toward Friday’s US Non-Farm Payrolls report as investors look for more data on the state of the US economy.
Expected Ranges
- AUD/USD: 0.6800 - 0.7000 ▲
- AUD/EUR: 0.6100 - 0.6300 ▼
- GBP/AUD: 1.9250 - 1.9450 ▼
- AUD/NZD: 1.0800 - 1.1000 ▲
- AUD/CAD: 0.9250 - 0.9450 ▲