Home Daily Commentaries AUD fall continues as US Dollar rally extended

AUD fall continues as US Dollar rally extended

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 13 November, 2024

Daily Currency Update

The Australian dollar sell off continued through trade on Tuesday amid another round of broad-based US dollar gains. Having given up US$0.6550 the AUD extended toward an intraday low at US$0.6514, its lowest mark since the election and a clear sign the bears continue to drive direction. Since the election the AUD has marked a series of lower lows and is entrenched in a downward channel. Added pressure continues to stem from further losses for the Chinese Yuan as markets continue to fell the disappointment of Friday’s meagre fiscal announcement out of Beijing. With the CNY giving up 7.24 and key commodities drifting lower the AUD is likely to face extended near term softness. With support holding at US$0.65 for now a break below this threshold could see the AUD test April lows near US$0.6430.

Our attentions today turn to domestic wage data and US CPI inflation numbers for direction.

Key Movers

The US dollar rally continued through trade on Tuesday with the DXY index up four tenths of a percent, breaking through 106 and marking a fresh 6 month high. US treasury yields surged, and the dollar followed suit as markets continue to back the world’s base currency following Trump’s re-election last week. With the USD on the front foot, the Yen gave up 0.66% while the Euro and GBP both suffered heavy losses. Sterling tumbled 1% on the day despite UK wage data printing largely in line with expectations and forcing markets to adjust BoE rate cut expectations. The Pound slid below 1.2750, marking session lows at 1.2727 while the Euro gave up 1.06 and set a new 2024 low at 1.0597. The question now is how far the rally can run. With US treasury yields surging 14 basis points to touch 4.44% overnight markets are now eyeing a breakthrough 4.5%. If yields extend to and through this tipping point, there is scope to suggest this bullish run has plenty of upside left. USD long positions are not yet in overbought territory and our attentions turn no to US CPI data for October as the ley macro marker leading direction through the next 24 hours.

Expected Ranges

  • AUD/USD: 0.6480 - 0.6600 ▼
  • AUD/EUR: 0.6100 - 0.6200 ▼
  • GBP/AUD: 1.9400 - 1.9700 ▼
  • AUD/NZD: 1.0990 - 1.1080 ▲
  • AUD/CAD: 0.9050 - 0.9180 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.