Home Daily Commentaries Aussie dollar trades above 63 US cents

Aussie dollar trades above 63 US cents

Daily Currency Update

The Aussie dollar is stronger this morning when valued against the greenback. The Australian dollar has featured a strong recovery on Friday’s US trading session. The pair bounced up from session lows at US$0.6210, rallying all the way to levels right below US$0.6380 and retracing the last two days' decline. The greenback pulled back across the board following a report from Wall Street Journal mentioning a debate at the upcoming FOMC meeting on how to continue rising interest rates. The AUD / USD pair is currently trading at US$0.6387 at the time of writing.

On the data front today we will see the release of Purchasing Managers' Index (PMI) which is a survey of about 400 purchasing managers that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The Reserve Bank of Australia (RBA) Assistant Governor (Financial Markets) Christopher Kent is due to speak at the Commonwealth Bank Global Markets Conference in Sydney. On Tuesday the RBA will release its annual report. All eyes this week will be on the Australian Bureau of Statistics Consumer Price Index (CPI) release on Wednesday. An important release as Consumer prices accounts for a majority of overall inflation.

Key Movers

The British pound failed on its assault to USD$1.1300 earlier on Friday, although the ensuing reversal has found support at USD$1.1220 and the pair picked up again to the USD$1.1250 area. The GBP/USD remains moderately positive on the day and is in track to regain the previous two days' losses. On the data front, UK Retail consumption contracted by 1.4% in September, well above market expectations of a 0.5% decline, and was 6.9% lower than the same month last year, according to data reported by National Statistics released earlier on Friday.

US Treasury yields hit the pause button on Friday following suspected Bank of Japan intervention and signals that the Federal Reserve might consider less aggressive inflation-curbing tactics after November. This led to all three major US stocks to surge but more than 2%, notching their biggest Friday-to-Friday percentage gains since June. The two-year yield slumped 12.7 basis points to 4.48% and the 10-year rate slipped less than a basis point to 4.22% after the Wall Street Journal published the fact that certain Federal Reserve officials are becoming uncomfortable with the speed of interest-rate hikes. The Fed has raised its target funds rate by 300 basis points since the policy tightening began this year.

Expected Ranges

  • AUD/USD: 0.6300 - 0.6500 ▲
  • AUD/EUR: 0.6400 - 0.6600 ▲
  • GBP/AUD: 1.7700 - 1.7900 ▲
  • AUD/NZD: 1.0950 - 1.1150 ▼
  • AUD/CAD: 0.8600 - 0.8800 ▼