Home Daily Commentaries Aussie dollar unable to find support falling below 62 US cents

Aussie dollar unable to find support falling below 62 US cents

Monday 17 October, 2022

Daily Currency Update

On Friday, the Australian dollar finished the week tumbling below US$0.6200 amidst a dampened market mood and after a better-than-estimated US inflation report, with investors dumping any risk-perceived currencies. Therefore, the AUD/USD accelerated its downfall, trading at US$0.6199, below Friday’s opening price by 1.58%. In the short term, the AUD/USD is neutral biased, which could open the door for further downside action. Therefore, the AUD/USD first support would be the YTD low of US$0.6169, followed by the US$0.6100 figure. The break below will expose the figure at US$0.6000. The AUD/USD pair is currently trading at US$0.6191. Looking ahead this week on the data front and today and there are no local scheduled releases. On Tuesday Reserve Bank of Australia (RBA) Deputy Governor Michele Bullock is due to speak at the Australian Finance Industry Association Annual Conference in Sydney. We will also see the release of the RBA Monetary Policy Meeting Minutes which provide a detailed record of the RBA Reserve Bank Board's most recent meeting and in-depth insights into the economic conditions that influenced their decision on where to set interest rates. On Thursday we will see the release of the NAB Quarterly Business Confidence survey which is a leading indicator of economic health. However, all eyes on Thursday will be on the Australian Bureau of Statistics' unemployment rate decision with the market forecast for the unemployment rate to remain at 3.5%.

Key Movers

On Friday in the United States market sentiment remained dampened. US economic data showed that consumer spending is weakening, as demonstrated by September’s Retail Sales coming at 0% MoM, below estimates, and August’s 0.3%. Annually based sales slowed by 8.41% annually, while the University of Michigan Sentiment improved edged higher to 59.8, exceeding estimates, though inflation expectations for one year heightened to 5.1%, up from August’s 4.7%. The higher rates backdrop saw renewed USD strength and equity market weakness. The S&P500 was down 2.4% and the NASDAQ just over 3% on Friday, both effectively reversing their surprising rallies after the US CPI data from the previous day. It’s likely to be another volatile week offshore this week. US earnings season starts to kick into gear with Bank of America, Netflix, and Tesla among the companies reporting this week.

Expected Ranges

  • AUD/USD: 0.6100 - 0.6300 ▼
  • AUD/EUR: 0.6300 - 0.6500 ▼
  • GBP/AUD: 1.7900 - 1.8100 ▲
  • AUD/NZD: 1.1000 - 1.1300 ▲
  • AUD/CAD: 0.8500 - 0.8700 ▼