Aussie dollar falls below US$0.67
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.6664 at time of writing. The AUD/USD pair surrendered its intraday gains and turned negative in Friday’s North American session in the aftermath of the United States (US) Non Farm Payrolls (NFP) data for August, which increased buying interest of the US dollar. Reserve Bank of Australia (RBA) Governor, Ms Bullock in a speech to the Anika Foundation in Sydney on Thursday afternoon made her comments about "The Costs of High Inflation". Her comments came a day after new data showed Australia's economy was growing at its slowest pace since the 1990s recession, as households cut back significantly on spending. The economy grew by 0.2 per cent in the June quarter, and by just 1 per cent over the last year, according to the Australian Bureau of Statistics (ABS). Underlying inflation is currently running at an annual pace of 3.8 per cent, which is still above the RBA's target of 2.5 per cent. On Thursday, Ms Bullock said if the engineered economic slowdown kept tracking as the RBA anticipated, inflation could be sitting around 2.5 per cent by the end of 2026. Figures show core inflation has declined from 4.1 per cent in the December quarter, to 4 per cent in the March quarter, to 3.9 per cent in the June quarter. Looking ahead this week on the data front, on Tuesday we will see the release of both the Westpac Consumer Sentiment and NAB Business Confidence. On Wednesday, RBA Assistant Governor (Economic) Sarah Hunter is due to speak at the Barrenjoey Economic Forum, in Sydney.Key Movers
Non Farm Payrolls (NFP) in the US rose by 142,000 in August, the US Bureau of Labor Statistics (BLS) reported on Friday. This reading followed the 89,000 increase (revised from 114,000) recorded in July and fell short of the market expectation of 160,000. Other details of the report showed the unemployment rate edged lower to 4.2%, with the Labor Force Participation unchanged at 62.7%. Finally, wage inflation, as measured by the change in Average Hourly Earnings, rose to 3.8% from 3.6% in July. While markets have ramped up their bets in favour of a rate reduction from the Fed this month, the data in itself hasn’t been sufficient to seal the deal for a 50 basis point cut, which remains less than 60% priced in by futures markets. Next week’s CPI report for August will now be key, as a miss here may be required for the FOMC to go big in September. Looking ahead this week and the August CPI inflation (Consumer Price Index) data will be widely watched on Wednesday. According to the Reuters poll, economists estimate headline YoY inflation to ease to +2.6%, 0.3 percentage points down from +2.9% in July (estimate range between +2.6% and +2.4%). The debate about whether the Fed will opt for a 25 or 50 basis point cut remains ongoing.Expected Ranges
- AUD/USD: 0.6550 - 0.6750 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9550 - 1.9750 ▲
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.8950 - 0.9150 ▼