Australian dollar edges higher as markets eye key data
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Daily Currency Update
The Australian dollar is enjoying a modest lift, trading around US$0.6565 at the time of writing, up about 0.20% for the day. The move comes as investors show a slightly stronger appetite for risk and the US dollar softens on growing expectations that the Federal Reserve may deliver more monetary easing in the months ahead. With markets leaning toward the possibility of additional rate cuts, the greenback has lost some momentum, giving the Aussie dollar extra breathing room in the short term. For now, sentiment remains the key driver. Each shift in expectations around the Fed’s policy outlook is quickly reflected in currency markets, and the Australian dollar has been one of the beneficiaries. If traders continue to anticipate easier US monetary conditions, the USD could remain on the back foot, allowing AUD/USD to hold—or even extend—its recent gains. Local factors are also in focus. In Australia, attention turns to the Services Purchasing Managers Index (PMI) due later today. This report will give investors a clearer sense of how the services sector is holding up, and whether domestic demand is showing signs of resilience heading into the end of the year. Even more important is the upcoming third-quarter Gross Domestic Product (GDP) release on Wednesday. Economists are generally expecting another quarter of steady growth. A stronger-than-expected reading would likely provide a confidence boost for the Australian dollar, reinforcing the view that the economy is weathering global uncertainty relatively well. On the other hand, a softer print could dampen some of the currency’s recent momentum. While the domestic outlook is improving, traders are keeping a close eye on developments in China. As Australia’s largest trading partner, China’s economic performance plays a crucial role in shaping demand for Australian exports. Recent concerns around weaker Chinese data have introduced a note of caution. If indicators from China continue to soften, they could limit how far the Aussie can climb, even with a weaker US dollar in the mix. Overall, the Australian dollar is benefiting from a supportive global backdrop and expectations of steady local growth. Still, external risks—particularly those tied to China—remain a key factor to watch. As markets digest this week’s data, the AUD/USD pair could see more movement, with traders balancing optimism over potential US rate cuts against lingering uncertainty abroad.Key Movers
The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, is holding almost perfectly steady, hovering around 99.43 despite a rise in US Treasury yields. After wavering between small gains and losses through the 99.40–99.50 range on Tuesday, the dollar managed to claw back a bit of the ground it lost earlier in the week. While the movement has been limited, the tone in markets suggests that traders are biding their time ahead of a packed US economic calendar. The stability in the dollar comes at an interesting moment, with Treasury yields ticking higher—typically a supportive factor for the currency. However, investors appear hesitant to make strong directional bets until they see how the latest round of economic indicators shapes the narrative around US growth and the Federal Reserve’s policy path. Today’s US data calendar is a busy one, giving markets plenty to digest. Things begin with the weekly Mortgage Bankers Association (MBA) mortgage applications report. Though not always a major market mover, the data can provide a useful snapshot of how higher borrowing costs are affecting housing demand. The spotlight will then shift to the ADP Employment Change report, often viewed as a preview of the all-important nonfarm payrolls data due later in the week. Strong job growth could reinforce the idea that the US labour market remains resilient, while softer numbers may add to expectations that the Fed has room to take a more cautious, potentially more dovish stance. Next up are the Export and Import Prices, key indicators that help markets gauge inflationary pressures within global trade flows. These figures can offer an early hint of how broader inflation might evolve in the months ahead, shaping expectations around interest rates. Later in the session, the ISM Services PMI will attract significant attention. As the services sector makes up the majority of US economic activity, any signs of weakness or strength can move markets quickly. A solid reading would suggest ongoing economic momentum, whereas a slowdown could raise fresh concerns about demand. Additional releases include Industrial Production, Manufacturing Production and Capacity Utilisation—three reports that together give a comprehensive view of the health of the American industrial sector. Rounding out the day, traders will also have the final S&P Global Services PMI to review, offering a second lens on service-sector performance, as well as the weekly EIA crude oil inventory report, which tends to influence energy markets but can also affect broader risk sentiment. Overall, with so many data points on deck, the US dollar is likely to see more movement as the day unfolds. For now, though, the greenback is holding its ground, steady but watchful as markets await clearer signals about the direction of the US economy.Expected Ranges
- AUD/USD: 0.6450 - 0.6650 ▲
- AUD/EUR: 0.5550 - 0.5750 ▲
- GBP/AUD: 2.0050 - 2.0250 ▼
- AUD/NZD: 1.1350 - 1.1550 ▼
- AUD/CAD: 0.9100 - 0.9300 ▲