Aussie dollar rallies above 64 US cents
Monday 7 November, 2022
Daily Currency UpdateThe Aussie dollar is slightly weaker this morning when valued against the greenback. The Australian dollar recovered on Friday, rallying about 2.5% on the day amid a favourable market sentiment, to regain most of the previous six days’ losses. The pair bounced up at the US$0.6280 area earlier on Friday to reach highs at US$0.6475 during the midday US trading session, before consolidating above US$0.6425. Friday’s sharp rally has pushed the pair to an important resistance area between US$0.6470 and US$0.6520. The AUD/USD pair is currently trading at US$0.6403 at the time of writing.
On the data front this week and on Monday we will see the release of the Australia and New Zealand Banking Group (ANZ) job advertisements. This data tends to have more impact when it's released ahead of the government employment data rather than after. On Tuesday we will see the release of the Westpac-Melbourne Institute Consumer Sentiment survey and the National Australia Bank (NAB) Business confidence survey. Also on Tuesday, we will hear from the Reserve Bank of Australia (RBA) Governor Philip Lowe who is due to participate in a panel discussion titled "Inflation Uncertainty and its Effects on Policy Decisions" at the High-Level Conference on Global Risk, Uncertainty, and Volatility, in Zurich. On Wednesday RBA Deputy Governor Michele Bullock will speak about the economic outlook at the Australian Business Economists Annual Dinner in Sydney. Audience questions are expected. On Thursday we will see the release of the Melbourne Institute (MI) Inflation Expectations report.
Key MoversOn Friday US employment figures have shown mixed readings in October, which has increased the weakness of an already vulnerable US dollar as risk appetite returned to the markets. Non-Far private employment increased by 261K in October, beating expectations of 200K, while September’s figures were revised to 315K, up from the previously estimated 264K. Investors’ enthusiasm about the strong employment data has been offset by the higher-than-expected unemployment rate, which rose to 3.7% from 3.5% in September, beating the consensus of a 3,6% reading, and the slowdown on hourly wages, 4,7% in October from 5% in September. US equity markets were higher on Friday, helped by the optimism around China and the pullback in Fed rate expectations. The S&P500 and NASDAQ were both 1.4% higher, while the EuroStoxx 600 was up almost 2%.
The pound has continued appreciating during Friday’s US afternoon trading, buoyed by the broad-based USD weakness, to reach session highs at US$1.1380. The GBP was by far the weakest currency on the week, down over 2%, reflecting the Bank of England’s dovish messaging at its monetary policy meeting, with Governor Bailey saying the Bank thought the market was overpricing the likely extent of tightening. The GBP/USD pair has shrugged off the previous day’s negative pressure on Friday, to perform a shocking 1.9% daily rally after bouncing from the lower range of the US$1.1100s to close the week a few pips shy of US$1.1400.
- AUD/USD: 0.6300 - 0.6500 ▲
- AUD/EUR: 0.6350 - 0.6550 ▲
- GBP/AUD: 1.7500 - 1.7700 ▼
- AUD/NZD: 1.0800 - 1.1000 ▼
- AUD/CAD: 0.8550 - 0.8750 ▼