AUD edges higher as domestic rate cut expectations delayed
Written by
Daily Currency Update
With US markets closed in observance of Thanksgiving headline news has been light and price action well contained. The AUD found some support through the local session following comments from RBA governor Michelle Bullock. Bullock spoke to the lingering risks of inflation, sticking to the script and indicating it is still too soon to cut interest rates. The RBA is looking through the near-term softening in inflation and wants to see a meaningful and sustained move back to target. Having slipped toward intraday lows at US$0.6480 the AUD edged higher following Bullock's comments and opens this morning near US$0.65.Our attention now turns to Euro area CPI, China PMI data and Canadian GDO numbers for direction through the weekend.
Key Movers
A quiet day across majors as US markets closed in observance of Thanksgiving limiting headline newsflow and tier 1 macro data releases. The USD was flat with the DXY index maintaining a narrow trading handle while most action happened across European markets. German CPI data printed softer than expected and suggest a further softening in wider Euro area CPI tonight. In France, budget concerns continue to spark broader political instability. While concessions have been made there are still difficulties and a long way to go before a vote of no confidence can be avoided. Finally, Comments from ECB member Villeroy hinted at further future rate cuts. Villeroy noted inflation is nearing a sustainable 2% target and with growth still sluggish there was no reason for policy to remain restrictive. Pricing for a rate cut in December firmed and the euro underperformed closing 0.2% lower on the day, sliding off highs near 1.0590 to trade nearer 1.0550.Our attention today turns to Euro CPI numbers and Canada GDP data.
Expected Ranges
- AUD/USD: 0.6400 - 0.6550 ▲
- AUD/EUR: 0.6120 - 0.6220 ▲
- GBP/AUD: 1.9400 - 1.9600 ▲
- AUD/NZD: 1.0980 - 1.11200 ▲
- AUD/CAD: 0.9020 - 0.9120 ▼