Aussie dollar finds support at 68 US cents
Thursday 23 February, 2023
Daily Currency UpdateThe Australian dollar is slightly weaker this morning when valued against the Greenback. The AUD/USD prolonged its losses during the Wednesday session and dropped nearby the day’s low of US$0.6808 after the release of the Federal Open Market Committee (FOMC) minutes, which revealed that “few participants” favoured a 50 bps rate hike. At the time of writing, the AUD/USD exchanges hands at US$0.6802. On the data front yesterday Australian workers have had the biggest end-of-year wage growth in a decade, according to new data released by the Australian Bureau of Statistics. The wage price index (WPI) rose 0.8 per cent, the best performance in the December quarter since 2012. It made for a 3.3 per cent annual wage growth, a dramatic spike not seen in a decade. Private sector wage growth was slightly higher than public sector wages. But despite the overall rise, only 21 percent of private sector workers got a pay rise in the December quarter. Annual wage growth was the highest in the wholesale trade industry, where workers got a 4.2 percent raise in 2022. Looking ahead today on the data front and RBA Deputy Governor Michele Bullock is due to testify before the Parliamentary Joint Committee on Corporations and Financial Services, in Sydney. She's responsible for advising Reserve Bank Board members who decide where to set the nation's key interest rates on matters relating to economics, and her public engagements are often used to drop subtle clues regarding future policy shifts. We will also see the release of the quarterly Private Capital Expenditure a leading indicator of economic health as businesses are quickly affected by market conditions, and changes in their investment levels can be an early signal of future economic activity such as hiring, spending, and earnings.
Key MoversA solid majority of Federal Reserve officials agreed at their last policy meeting to slow the pace of increases in the U.S. central bank's benchmark overnight interest rate to a quarter of a percentage point, but also said the risks of high inflation remained a "key factor" shaping monetary policy and warranted continued hikes in borrowing costs until it was controlled. That was a moderation from their half-point hike in December after four consecutive jumbo-sized 75 basis-point increases. The action brought the Fed’s benchmark policy rate to a target range of 4.5% to 4.75%. Projections issued at the Fed’s December meeting showed officials saw rates rising slightly above 5% this year and staying there for a while to bring inflation down to the central bank’s 2% target. Investors previously doubted that message, and were pricing in rate cuts for the second half of this year.
- AUD/USD: 0.6700 - 0.6900 ▼
- AUD/EUR: 0.6300 - 0.6500 ▼
- GBP/AUD: 1.7600 - 1.7800 ▲
- AUD/NZD: 1.0850 - 1.1050 ▼
- AUD/CAD: 0.9100 - 0.9300 ▲