Home Daily Commentaries Aussie dollar unable to hold on to overnight gains

Aussie dollar unable to hold on to overnight gains

Friday 21 October, 2022

Daily Currency Update

The Aussie dollar continues to trade below 63 US cents this morning. The AUD/USD pair rallied over 100 pips from a three-day low touched on Thursday. The Australian dollar advanced in the North American session, to reach a high of 0.6356, which kept the greenback pressured, as shown by the US Dollar Index (DXY). At the time of writing, the AUD/USD is currently trading at 0.6276, up 0.13%. On the data front yesterday we saw the Unemployment report released by the Australian Bureau of Statistics (ABS). Australia's official unemployment rate has remained at 3.5%, after the creation of just 900 extra jobs in September. The fall in unemployment over the past couple of years, to the lowest level in almost half a century, has created opportunities for many people. The jobless rate came in on par with market consensus, but disappointed expectations that 25,000 new people would be employed over the month. People seeking work in NSW edged down to 148,000, according to the Bureau of Statistics, while recent job vacancy data showed 150,800 positions needed to be filled heading into the month. The participation rate remained steady at 66.6%, which the ABS said was consistent with the relatively small changes in the labour market. There are no scheduled releases on Friday.

Key Movers

Overnight, UK Prime Minister Liz Truss announced her resignation after a month and a half in power. Liz Truss will become the shortest-serving prime minister in Britain's history after bowing to pressure from her own MPs to resign following a disastrous start to her premiership. It follows weeks of plummeting opinion polls and turmoil in financial markets following her government's mini-budget at the end of last month. She will remain as prime minister until a leadership election is completed within the next week to find her replacement, and there's speculation Boris Johnson is considering a bid to return to the top job. Ms. Truss, who has been in power for just 45 days, will become the shortest-serving prime minister in Britain's history – George Canning previously held the record, serving 119 days in 1827 before he died. The Great British pound overnight has given away most of the ground taken after the announcement of Prime Minister Truss's resignation and remains practically unchanged. The GBP/USD pair rallied to session highs at 1.1330, with the market celebrating the departure of Truss’s controversial government, to lose steam shortly afterward and return to the lower ranges of 1.1200. The euro also pairing losses with the British pound retreating from session highs as the dust from UK PM Liz Truss's resignation settles. The EUR/GBP pair found support at 0.8675 to reach 0.8715 at the moment of writing.

Expected Ranges

  • AUD/USD: 0.6200 - 0.6400 ▼
  • AUD/EUR: 0.6300 - 0.6500 ▼
  • GBP/AUD: 1.7800 - 1.8000 ▲
  • AUD/NZD: 1.0950 - 1.1150 ▲
  • AUD/CAD: 0.8550 - 0.8750 ▲