Aussie dollar trades below US$0.66
Daily Currency Update
The Australian dollar is again weaker this morning when valued against the Greenback, currently trading at US$0.6583 at the time of writing. Extra losses might send the AUD/USD to its October low of US$0.6579 (October 28), ahead of the 2024 low of US$0.6347 (August 5). The impact of the hawkish rhetoric from the Reserve Bank of Australia (RBA) is being offset by ongoing concerns about China.Data released this weekend revealed that industrial profits fell 27% year-on-year, highlighting the erratic recovery of Australia’s main trading partner and hindering a significant Aussie rebound. The AUD/JPY pair recovers its recent losses seen over the past two sessions, trading around 101.20 during early European hours on Monday. The upward movement in AUD/JPY could be linked to growing uncertainty surrounding the Bank of Japan's (BoJ) rate-hike plans, now compounded by Japan’s ruling coalition losing its parliamentary majority.
On the data front, on Wednesday the Australian Bureau of Statistics will release the latest Consumer Price Index (CPI). Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. On Thursday we will see the release of the monthly retail sales and building approvals.
Finally, on Friday we will see the release of the monthly Producer Price Index (PPI) which is another leading indicator of consumer inflation - when producers charge more for goods and services the higher costs are usually passed on to the consumer.
Key Movers
The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, declined on Monday. This reversed earlier gains amid profit-taking ahead of key economic figures from October to be released later this week. The Dow Jones Industrial Average (DJIA) has recovered from Friday’s 300-point loss, climbing over 0.84% or 350 points, even though US Treasury bond yields continued to rise.Investors are capitalising ahead of the release of crucial economic data from the United States (US) that will feature the release of Gross Domestic Product (GDP) figures, Nonfarm Payrolls (NFP) and the Federal Reserve’s (Fed) favourite inflation gauge — the Personal Consumption Price Expenditures (PCE) Price Index. Gold traded slightly below its opening price at the beginning of the week and is down by 0.15%, weighed down by rising US Treasury yields.
The XAU/USD trades at $2,742 after hitting a daily high of $2,747. The yield on the US 10-year Treasury note continued to climb, up by three basis points at 4.272%. This has kept Bullion prices from recording a new all-time high above $2,758 as some analysts eye the $2,800 mark toward the end of the year.
Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.9600 - 1.9800 ▲
- AUD/NZD: 1.0900 - 1.1100 ▲
- AUD/CAD: 0.9050 - 0.9250 ▼