Home Daily Commentaries AUD pushed back above US$0.6750 as more US recession signals emerge

AUD pushed back above US$0.6750 as more US recession signals emerge

Daily Currency Update

The Australian dollar, while still firmly range bound, opens higher this morning, buoyed by weaker than anticipated second tier US data. When measured against most counterparts the AUD tracked sideways for much of the local session; except against the NZD. The AUD lurched off intraday lows near 1.08 to surge through 1.0850 and 1.09 following weaker than anticipated Q1 inflation data. With a peak in NZ inflation and RBNZ policy, the door is now open for the AUD to claw back recent losses and push back toward 1.10.

Having shown little to excite investors through the local session, the AUD jumped off session lows just south of US$0.67 following weaker than anticipated US business confidence and an uptick in jobless claims. With US equities falling, following a series of weaker earnings reports, demand for the US dollar faltered. After marking intraday highs of US$0.6770 the AUD opens this morning marginally below US$0.6750.

Our attentions turn now to a host of European and US service and manufacturing data drops. Globally, service activity continues to operate in expansionary territory, while manufacturing sectors are offering contractionary signals. We are keenly attuned to US PMI updates as a key measure in driving near-term rate expectations.

Key Movers

The US dollar tracked lower through trade on Thursday after weaker than anticipated second tier data. Philadelphia’s Fed Business outlook survey fell eight points to its lowest level since the outbreak of the pandemic. After stronger than anticipated New York manufacturing activity earlier this week, the softer print highlights just how volatile and regionalised these surveys are. Having tracked lower the USD extended the downturn after Jobless claims pushed higher. Rising first time jobless claims were coupled with an uptick in continuing jobless claims, a worrying sign for the labour market. Some 33% of US States have reported jobless claims more than 30% higher than this time last year, a clear signal the US economy is running headlong toward recession. With the USD weaker the euro consolidated its peak above 1.0950, while the GBP held above 1.24 and the JPY outperformed amid a lower global rates backdrop.

Our attentions turn now to global PMI data updates.

Expected Ranges

  • AUD/USD: 0.6680 - 0.6820 ▲
  • AUD/EUR: 0.6080 - 0.6220 ▲
  • GBP/AUD: 1.8220 - 1.8680 ▼
  • AUD/NZD: 1.0820 - 1.0950 ▲
  • AUD/CAD: 0.9020 - 0.9150 ▲