Aussie dollar trades above 63 US cents
Daily Currency Update
The Australian dollar is stronger today when valued against the greenback trading above 63 US cents. US dollar comes under renewed selling pressure on Monday with the AUD/USD pair builds on its steady intraday ascent and hit a fresh daily high around 0.6312 during the early North American session. Retreating US Treasury bond yields turns out to be a key factor weighing on the greenback. Apart from this, the risk-on impulse as depicted by a strong rally in the equity markets which further undermines the safe-haven buck and benefits the risk-sensitive Australian dollar. The AUD/USD pair is currently trading at 0.6292.Looking ahead today and the 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, providing 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
Overnight the UK's Chancellor of the Exchequer Jeremy Hunt has reversed most of an economic package announced by the government just weeks ago, including a planned cut to income tax. In a bid to soothe turbulent financial markets scrapping "almost all" the tax cuts announced last month and signalled public spending cuts are on the way. Mr Hunt also scaled back a cap on energy prices designed to help households pay their bills. The moves aimed at restoring the government's credibility for sound fiscal policy after Ms Truss and Mr Kwarteng rushed out a plan for tax cuts without detailing how they would pay for them. Market now pricing for the Bank of England’s November meeting now sits a little under 100bps with a peak rate of 5.15%, well below the 150+bps and peak rate of over 6.25% seen near the end of September. UK gilt yields have plunged overnight in the order of 35-45bps and GBP is the best performing of the majors, up nearly 2% to just under 1.14.Expected Ranges
- AUD/USD: 0.6200 - 0.6400 ▲
- AUD/EUR: 0.6300 - 0.6500 ▲
- GBP/AUD: 1.7950 - 1.8150 ▲
- AUD/NZD: 1.1050 - 1.1250 ▲
- AUD/CAD: 0.8500 - 0.8700 ▲