Home Daily Commentaries Australian Dollar surges amid weaker US data

Australian Dollar surges amid weaker US data

Daily Currency Update

The Australian dollar surged through resistance on Wednesday, breaking above US$0.67 and marking intraday highs not seen since early January. A weaker-than-anticipated US ISM Services report and an uptick in US weekly jobless claims forced a sharp correction across US yields and a steep retracement in the USD. The ISM Services index fell 5 points, slipping below 50 and entering contractionary territory while US jobless claims rose more than expected, signalling further softening in labour market conditions. With the DXY index on the back foot, the AUD jumped more than half a percent marking highs just south of US$0.6735 before edging back toward US$0.67. The question now is, can the AUD sustain a break above recent ranges? An extended run above resistance at US$0.6680 could see the AUD enter a new, higher trading band.

Our attentions now turn to US non-farm payroll numbers on Friday as a critical marker in governing near-term direction.

Key Movers

There is plenty to digest this morning with price action among the majors showing signs of life after an extended period of narrow moves. A much softer than expected US ISM Services print coupled with an uptick in US jobless claims forced a sharp retracement in US treasury yields and the USD as markets brought forward bets for a Fed rate cut. The DXY dollar index fell 0.35% as commodity currencies led gains. The NOK, SEK and AUD all climbed over half a percent with the NOK and SEK up more than 1% while the euro and GBP both advanced. The euro tested a break above 1.08 marking session highs at 1.0812 before edging back toward 1.0775, closing 40 points higher on the day. The GBP surged through 1.27 to mark highs just short of 1.2780 before correcting back toward 1.2730, up more than 50 points on yesterday’s open. The only laggard for the day was the Japanese yen. The yen allowed the USD to mark new highs at 161.95 before pushing back, forcing the USD back to 161.70, still closing lower through the last 24 hours.

Our attentions now turn to UK polling booths with the UK General Election underway. Anything short of a landslide labour win will come as a major shock and could prompt GBP volatility. In Europe, we look to the ECB June meeting minutes and German factory orders for key macro updates. US markets will be closed in observance of Independence Day.

Expected Ranges

  • AUD/USD: 0.6600 - 0.6750 ▲
  • AUD/EUR: 0.6150 - 0.6250 ▲
  • GBP/AUD: 1.8800 - 1.9200 ▼
  • AUD/NZD: 1.0950 - 1.1050 ▲
  • AUD/CAD: 0.9100 - 0.9200 ▲

Written by

Matt Richardson


As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.