Aussie dollar holds on to 68 US cents
Friday 24 February, 2023
Daily Currency UpdateThe Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar recovered some ground on Thursday after falling to fresh February lows at US$0.6803, though it recovered some ground despite overall US dollar (USD) strength across the board. A risk-on impulse is another reason that it’s underpinning the Australian dollar (AUD). At the time of writing, the AUD/USD exchanges hands at 0.6810. NZD/AUD has sustained its move higher post-RBNZ and softer AU wage data earlier in the week, which saw a widening in NZ-AU yield differentials. NZD/AUD opens this morning just under 0.9150. There is nothing on the local calendar today. Offshore, Japanese inflation is expected to lift further. Keep an eye out for Ueda, the nominee to be the new Bank of Japan governor, as he testifies before the Diet. Looking ahead next week and on Tuesday the Australian Bureau of Statistics will release the Retail Sales figures for the month. This is the earliest look at vital consumer spending data. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity. On Wednesday all eyes will be on the monthly Consumer Price Index (CPI). Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. On Wednesday we will also see the release of the Gross Domestic Product (GDP), the broadest measure of economic activity and the primary gauge of the economy's health. Finally on Friday we will see the release of monthly Building Approvals.
Key MoversThe US dollar strengthened after the release of the latest meeting minutes. The first Federal Open Market Committee's (FOMC) Minutes of 2023 has been released with investors searching for further insights into the near-term path for policy, and any comments regarding the possibility of the Federal Reserve going back to 50bps hikes. Key notes from FOMC minutes showed a few participants favoured raising rates by 50 basis points and all participants agreed more rate hikes are needed to achieve FOMC's inflation objectives. US equities initially held up, but then extended the past week’s downtrend. The S&P500 currently sits down around 0.3%, with materials and consumer discretionary sectors among the laggards. Data from the United States (US) portrayed the tightness of the labor market after the Department of Labor (DoL) revealed Initial Jobless Claims for the week ending on February 18. The claims rose by 192K, below the 200K estimated and beneath last week’s 194K. In a separate report, the US Department of Commerce (DoC) featured the US Gross Domestic Product (GDP) for Q4, which on its second estimate came at 2.7%, below the prior’s reading of 2.9%.
- AUD/USD: 0.6700 - 0.6900 ▼
- AUD/EUR: 0.6350 - 0.6550 ▼
- GBP/AUD: 1.7550 - 1.7750 ▲
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.9100 - 0.9300 ▼