Home Daily Commentaries The Aussie dollar continues to trade below US$0.63

The Aussie dollar continues to trade below US$0.63

Thursday 20 October, 2022

Daily Currency Update

The Aussie dollar continues to trade below US$0.63 overnight. The Australian dollar is giving away previous gains on Wednesday, weighed by a stronger US dollar in a deteriorated market mood. The pair has pulled back from Tuesday’s high at US$0.6330, returning to the mid-range of US$0.6200. The Reserve Bank of Australia’s decision to slow down the pace of monetary tightening has increased negative pressure on the Australian dollar. The AUD/USD pair maintains its offered tone through the early North American session and is currently placed near the daily low, around the US$0.6280-US$0.6275 region. The Australian dollar is currently trading at US$0.6271 at the time of writing. On the data front, today, all eyes will be on the Unemployment report released by the Australian Bureau of Statistics- at 11.30 am AEDT. The forecast is for the unemployment rate to remain at 3.5%, with the Employment Change gaining 25.5k jobs for the previous month. Locally today, we will also see the release of the NAB Quarterly Business Confidence, a survey of about 1,000 businesses asking respondents to rate the relative level of current business conditions and expectations for the near and medium-term future. There are no scheduled releases on Friday.

Key Movers

Overnight the Great British pound seems to be attempting to set a bottom at 1.1185 after its reversal from £1.1445 highs earlier this week. The pair dropped for the second consecutive day on Wednesday, weighed by negative inflation data and political uncertainty in the UK as the turmoil in the UK government, with the ruling Tory party plotting to replace the recently elected Prime Minister Liz Truss after her tax cut fiasco is adding negative pressure on the pair. Overnight British Prime Minister Liz Truss has been engulfed in yet more chaos, losing a second minister in a week with the resignation of Home Secretary Suella Braverman. The resignation letter also contained a scathing review of Truss’s leadership and indicated deep fissures in the heart of her government. Official figures released on Wednesday showed UK inflation rose to 10.1 per cent in September, returning to a 40-year high first hit in July, as the soaring cost of food squeezed household budgets.

Expected Ranges

  • AUD/USD: 0.6150 - 0.6350 ▼
  • AUD/EUR: 0.6300 - 0.6500 ▼
  • GBP/AUD: 1.7750 - 1.7950 ▲
  • AUD/NZD: 1.0900 - 1.1100 ▼
  • AUD/CAD: 0.8500 - 0.8700 ▼