Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback. The AUDUSD pair edged higher yesterday, to the mid-0.6600s during the early Asian session on Wednesday. A softer Greenback triggered by a less hawkish stance from the Federal Reserve (Fed), lends some support to the AUDUSD pair. Australia’s inflation rate eased sharply in October as weak consumer spending made it less likely the Reserve Bank would inflict another interest rate rise on the economy. The consumer price index rose at an annual clip of 4.9% last month compared with a 5.6% pace in September alone, the Australian Bureau of Statistics said on Wednesday. Economists had expected CPI to come in at 5.2%. Among the big movers was a 6.1% increase in the cost of housing, while transport costs rose 5.9% and food and non-alcoholic beverages increased 5.3%. Compared with the previous month, CPI retreated 0.3% in October, according to Westpac, which had been tipping a 0.2% increase. Rents were down 0.4% for the month, while holiday travel costs dropped 7%. The inflation figures are the last major numbers the RBA board will have to consider when it meets next Tuesday for its final meeting of the year on interest rates. The AUDUSD pair is currently trading around 0.6620 at time of writing.
Key Movers
The US economy grew at an even faster pace in the third quarter than originally estimated, reflecting upward revisions to business investment and government spending. Gross domestic product rose at an upwardly revised 5.2 per cent annualised pace in the third quarter, the fastest in nearly two years. Consumer spending advanced at a less-robust 3.6 per cent rate, according to the government’s second estimate of the figures issued Wednesday. The government’s other main gauge of economic activity - gross domestic income - rose a more moderate 1.5 per cent. GDI is a measure of the income generated and costs incurred from producing goods and services. The average of the two growth measures was 3.3 per cent, more than double the average pace of the first half of the year. Ahead in the calendar, the US calendar will feature the Fed’s preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE) price index, along with employment data on Thursday.
Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▲
- AUD/EUR: 0.5900 - 0.6100 ▲
- GBP/AUD: 1.9100 - 1.9300 ▼
- AUD/NZD: 1.0650 - 1.0850 ▼
- AUD/CAD: 0.8900 - 0.9100 ▲