AUD continues upward movement toward US$0.6800 whilst USD losses ground
Friday 9 December, 2022
Daily Currency UpdateThe Australian dollar is starting to enjoy a sustained recovery period after posting gains for the second consecutive day against the US dollar, having broken through the key resistance level of US$0.6750. Lackluster US economic data bear most of the responsibility for the modest slide-off during the US session, as Jobless Claims had risen as forecasted to 230,000 in the week ending December 3. Continuing Claims also increased by 62,000 to 1.671 million in the week ending November 26, which was 96,000 more than what the market had forecasted, the highest level since February. Rising commodity prices of gold, silver and crude oil have also aided the Australian dollar in gaining some momentum, providing an overall positive short-term outlook for the AUD/USD pair. The next levels of resistance are US$0.6780 and US$0.6795, which will extend a broader and longer run recovery towards US$0.6800 and beyond going into the new year. All eyes will be on US domestic data (PPI MoM, Michigan consumer sentiment preliminary, etc.) and China, which will be reporting its consumer price index for November this Friday with the market forecasting an increase of 1.5% p.a.
Key MoversThe US dollar has lost territory versus most of its key competitive majors before consolidating for the remainder of the US session, with the improved US stocks sentiment providing some support. The aforementioned increase in jobless claims and continuing claims were not taken favourably by the market whilst looking at other domestic growth areas which may combat rising inflation worries. In the absence of top-tier numbers and ahead of next week’s central bank decision, volatility has enjoyed a decline as the market is uncertain of the monetary policy movements to be expected. The market awaits the US Federal Reserve, European Central Bank, the Swiss National Bank, and the Bank of England providing updates on monetary policy next week. The GBP/USD and EUR/USD pairs have both reasonably tracked sideways for the last eight days, however, gains have been posted on the day of 0.35% and 0.49% respectively. The CAD/USD pair appreciated a push upward as general USD weakness prevailed. Deputy Governor of the Bank of Canada, Sharon Kozicki has advised that the bank will act strongly if required to adjust interest rates, following a review of recent economic data. Nothing to note on the JPY front with minimal movements seen on the day, currently trading at 135.67. The Chinese yuan has been able to hold onto its run higher, which started on November 27 as China continues to ease its Covid-zero policy and begin its path back to normality. Looking ahead, China will be reporting its consumer price index for November this Friday with the market forecasting an increase of 1.5% p.a., alongside the US announcing wholesale inflation data through their PPI release.
- AUD/USD: 0.6725 - 0.6780 ▲
- AUD/EUR: 1.5661 - 1.5552 ▲
- GBP/AUD: 1.8050 - 1.8190 ▼
- AUD/NZD: 1.0565 - 1.0626 ▲
- AUD/CAD: 0.9165 - 0.9250 ▲