Home Daily Commentaries AUD hobbled by broadly stronger USD as debt ceiling deal appears imminent

AUD hobbled by broadly stronger USD as debt ceiling deal appears imminent

Daily Currency Update

The AUD is weaker this morning, opening near the bottom of recent ranges following an uptick in US yields and a broadly stronger US dollar. The AUD maintained a narrow 30-point range for much of the domestic session, bouncing between US$0.6640 and US$0.6670, before a trio of US positive forces drove the currency toward intraday lows just above US$0.66. Fears of US Government default receded Thursday after House Speaker McCarthy suggested an agreement, at least in principle, could be reached as soon as this weekend. The increased confidence helped fuel USD gains, while Hawkish comments from Dallas Fed President Logan fueled a surge in US yields and rate expectations as she suggested the data did not yet justify a pause in the tightening cycle. With the USD on the front foot the AUD hit US$0.6605, before finding support and opens this morning buying US$0.6620. Our attentions today turn to Japan CPI data, UK consumer confidence, and US Fed commentary as key markers steering direction into the weekly close.

Key Movers

The USD outperformed all majors through trade on Thursday as forces combined to propel yields and the currency higher. Fears of Government default eased following positive commentary from House Speaker McCarthy and White House Representatives wherein it was suggested a deal could be struck by weeks end. US jobless claims fell larger than anticipated yet reports of fraudulent claims in Kentucky and Massachusetts cloud the quality of the data and do little to suggest any change to a softening trend. The combination of receding default fears, US jobless claims, and Hawkish Fed commentary helped fuel a rise in US yields, carrying the USD higher against all majors. With all units giving up near 0.5% against the USD there is little to report in the way of movement in key crosses and our attentions turn now to commentary from key Fed speakers Williams and Powell, while former Fed President Ben Bernanke hits the wires, and Japan CPI and UK consumer sentiment dominate the macro ticket.

Expected Ranges

  • AUD/USD: 0.6580 - 0.6730 ▼
  • AUD/EUR: 0.6120 - 0.6220 ▼
  • GBP/AUD: 1.8680 - 1.8880 ▲
  • AUD/NZD: 1.0580 - 1.0680 ▼
  • AUD/CAD: 0.8880 - 0.8980 ▼