Aussie dollar trades below 66 US cents
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.6574 at time of writing. Yesterday, the Aussie dollar fell below 0.6600 due to multiple headwinds. A sharp recovery in the Greenback and weakness in the Australian Dollar due to less-hawkish interest rate guidance from the Reserve Bank of Australia (RBA). The RBA left its cash rate on hold at 4.35% for a fourth consecutive meeting on Tuesday, a move that was widely expected. The RBA statement left its key message unchanged, with the bank remaining “vigilant to upside risks” to inflation. Before last month’s release of higher-than-expected inflation figures for the March quarter, most economists and investors had been forecasting the RBA to cut rates as soon as September. On the data front, there are no scheduled releases in Australia for the rest of the week.Key Movers
The US Dollar Index (DXY), which gauges the performance of the US dollar (USD) against six major currencies, edges higher to near 105.50. The higher US Treasury yields provide support for the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.84% and 4.47%, respectively, by the press time. The Dow Jones Industrial Average (DJIA) recovered from an early dip during the American trading session, climbing to an intraday high above 39,000.00 as the major equity index broke away from the crowd. The Dow Jones is on pace for a fifth consecutive gainer, climbing from the last swing low into 37,600.00. Looking ahead this week and due to the absence of top-tier United States economic data, investors will focus on speeches from policymakers: Fed Vice Chair Philip Jefferson, President of the Federal Reserve Bank of Boston Susan Collins and Fed Governor Lisa Cook to project the next move in the US Dollar.The Pound Sterling slipped below the psychological support of 1.2500 against the Greenback in Wednesday’s early New York session due to the ongoing uncertainty ahead of the Bank of England’s (BoE) interest rate decision, which will be announced on Thursday. Interest rates in the United Kingdom are expected to remain steady at 5.25% for the sixth time in a row. However, the BoE could turn slightly dovish on the interest rate outlook as policymakers are confident that the headline inflation could have returned to the desired rate of 2% in April.
Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.8900 - 1.9100 ▲
- AUD/NZD: 1.0840 - 1.1040 ▼
- AUD/CAD: 0.8900 - 0.9100 ▼