Aussie dollar continues to trade above 64 US cents
Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback, trading just above 64 US cents. The Aussie dollar is expected to continue its downside trend as the appeal for safe-haven assets has improved. The US Dollar recovered further overnight as Federal Reserve (Fed) policymakers see the need for more interest rate hikes to tame inflationary pressures in the coming months. The Australian dollar failed to gain strength despite an interest rate hike from the Reserve Bank of Australia (RBA) on Tuesday. The RBA raised its Official Cash Rate (OCR) by 25 basis points (bps) to 4.35%. RBA Governor Michele Bullock kept hopes of further rate-tightening alive, citing that the progress in inflation declining to 2% has slowed and risks of persistent consumer inflation have escalated.On the data front, this week Australian retail sales volumes rose 0.2% in the September quarter of 2023, Australian Bureau of Statistics (ABS) data revealed. ABS head of retail statistics Ben Dorber said the small rise in retail sales volumes follows three quarterly falls in a row. Retail volumes fell by 0.6% in the June quarter, 0.7% in the March quarter, and 0.6% in the December quarter of 2022. Despite the rise, retail sales volumes are down 1.7% compared to the September quarter last year. Compared to the same time last year, retail prices remain high, up 3.7% but are down considerably from the peak price growth of 7.6% in December quarter 2022. Other retailing was the only non-food industry to record a fall in the September quarter at negative 0.4%. This was the fourth quarterly fall in a row as volumes continue to moderate from the highs seen through the COVID-19 pandemic period.
Key Movers
The pound sterling is slightly weaker this morning when valued against the Greenback, extending its losses to three consecutive days and falls to a weekly low of 1.2241 as market sentiment shifted sour, as portrayed by Wall Street posting losses. At the time of writing, the major is trading at 1.2287, down 0.10%. Bank of England (BoE) governor Andrew Bailey pushed back against market bets on interest rate reductions, saying that officials need to carry on fighting inflation for now. Bailey reiterated that monetary policy will need to be restrictive for an extended period in comments that appeared to be more cautious about the possibility of lower rates than those made by BOE’s chief economist Huw Pill earlier in the week. Interest rate futures have fully priced in a quarter of a percentage points BoE rate cut for August 2024, with an additional one to November 2024. In the meantime, GBPUSD traders brace themselves for the release of third-quarter Gross Domestic Product (GDP) data, which is expected to show a contraction of 0.1% QoQ, on Friday. On the Eurozone (EU) front, inflation in Germany remains stickier at 3.8% YoY in October, unchanged compared to September’s data. EU Retail Sales shrank -0.3% MoM in September and 2.9% over the last twelve months.Expected Ranges
- AUD/USD: 0.6300 - 0.6500 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9100 - 1.9300 ▲
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.8700 - 0.8900 ▼