AUD maintains upward momentum as we move toward Christmas break
Daily Currency Update
The AUD tracked within a relatively narrow 40-point range through trade on Wednesday as investors sought to consolidate Tuesday’s gains. With little headline newsflow or key macroeconomic data on hand to spur direction, the AUD bounced between US$.6748 and US$0.6775 through much of the domestic session and overnight trade. Technical analysis suggests buyers remain in control on ranges above the newly formed 100-hour moving average and US$0.6726. A break below this level could signal a shift in sentiment and force a move back below US$.67 and toward US$0.6680. Having marked new 4-month highs at U$0.6778 the AUD slipped back below US$0.6740 after a stronger-than-anticipated US Conference Board consumer confidence survey showed a surge in consumer sentiment. Higher stocks and falling Gas prices helped fuel increased confidence while existing home sales recorded their first monthly increase in 6 months. The improved data helped US yields rally, adding some downward pressure on the AUD. The AUD is flat against most other majors, yet enjoyed a half per cent boost against the GBP after UK inflation fell much faster than anticipated through November and all but rules out the prospect of future rate hikes.Our attentions turn now to US GDP data and unemployment claims ahead of Friday’s PCE inflation Index as the key macro drivers of direction into the Christmas Holiday period.
Key Movers
The British pound was the day's big mover, giving up more than half a per cent against the USD and sliding against other key majors following a sharper-than-anticipated decline in inflation pressures. November CPI data showed a larger-than-expected fall in both headline and core inflation. Services inflation, while still stubbornly elevated, also tracked lower down to 6.3% from 6.6% in October. well below Bank of England forecasts at 6.9%. The easing of price pressures all but rules out another rate hike. UK Gilt yields tumbled across both 2 and 10-year rates forcing the GBP back below 1.27 and 1.2650 toward intraday lows at 1.2626. The sterling sell-off helped fuel a small uptick in the USD DXY index, while USDJPY and EURUSD were little changed.Our attentions turn now to US GDP data and unemployment claims ahead of Friday’s PCE inflation Index as the key macro drivers of direction into the Christmas Holiday period.
Expected Ranges
- AUD/USD: 0.6680 - 0.6780 ▼
- AUD/EUR: 0.6100 - 0.6200 ▲
- GBP/AUD: 1.8650 - 1.8950 ▼
- AUD/NZD: 1.0700 - 1.0800 ▼
- AUD/CAD: 0.8920 - 0.9060 ▼