Aussie dollar holds above 72 US cents
Monday 6 June, 2022
Daily Currency UpdateThe Australian dollar is weaker this morning when valued against the Greenback, trading just above US$0.72c. The AUD/USD pair continued to decline at the back end of last week, falling to a fresh multi-week low of 0.7248 on Friday. Global stocks traded dully throughout the week, collapsing on Friday, dragging the commodity-linked currency down with them. The Australian dollar has fared quite well with the Russian-Ukraine crisis, as higher commodity prices have provided support. However, as the crisis continues the market prices in a long haul conflict, gold and oil prices have begun receding, dragging the dollar lower. Looking ahead this week and all eyes will be on the Reserve Bank of Australia (RBA) monetary policy meeting on Tuesday, whereby Australia’s central bank is poised to implement back-to-back interest-rate increases for the first time in 12 years. Reserve Bank of Australia Governor Philip Lowe and his board will raise the cash rate by 40 basis points to 0.75%, according to 11 of 23 economists surveyed by Bloomberg and money markets. Three analysts see a half-point rise, while the remaining nine forecast a standard 25-basis point hike. The decision has exacerbated the pandemic-related bottlenecks, which in turn fuel inflation levels. Still, it is way behind the US Federal Reserve, which is expected to push rates towards the 2.75%-3% range by the end of the year, another reason behind AUD/USD’s slide.
Key MoversUS stocks fell broadly and pulled major indexes into the red for the week, as Wall Street focused on the downside of the still-strong US jobs market. The Jobs data showed employers hired more workers last month than economists expected. While that’s a good sign for the economy amid worries about a possible recession, many investors saw it keeping the Federal Reserve on its path to hiking interest rates aggressively. Friday’s report from the US government showed employers added 390,000 jobs last month, better than expectations for 322,500. The Dow Jones Industrial Average fell 348.58 points, or 1 per cent, to 32,899.70. The Nasdaq fell 304.16 points, or 2.5 per cent, to 12,012.73. The S&P 500 index fell 68.28 points, or 1.6 per cent, to 4,108.54. Looking ahead this week and the US will release March Durable Goods Orders, foreseen up 1% MoM, and the preliminary estimate of the Q1 Gross Domestic Product, expected to post a modest 1% gain. By the end of the week, the focus will shift to the core Personal Consumption Expenditures Price Index.
- AUD/USD: 0.7100 - 0.7200 ▲
- AUD/EUR: 0.6620 - 0.6820 ▲
- GBP/AUD: 1.7230 - 1.7430 ▼
- AUD/NZD: 1.0970 - 1.1170 ▲
- AUD/CAD: 0.8975 - 0.9175 ▲