Australian dollar holds firm amid weaker USD and steady risk sentiment
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Daily Currency Update
Overnight, the Australian Dollar (AUD) initially came under pressure against the US Dollar (USD), falling by more than 1% in early trading. However, it later regained ground to close slightly higher, ending the session around USD 0.6443, up approximately 0.13% for the day. The rebound occurred during a relatively quiet trading session, with no major economic data releases or catalysts, suggesting the recovery was driven more by positioning adjustments and stabilizing risk sentiment than by fundamentals. Overall, the AUD demonstrated resilience, managing to claw back early losses and hold steady against the USD. Against the New Zealand Dollar (NZD), the AUD slipped modestly, weakening by approximately 0.11%, with the pair dipping from around 1.0811 to 1.0799 NZD per AUD. This slight decline points to a mild softening in market confidence, though trading remained subdued within a narrow intraday range. Looking ahead, the AUD appears poised to hold its ground or edge slightly higher against the USD, supported by easing global risk aversion and increasing expectations of U.S. Federal Reserve rate cuts. Continued softness in the USD is underpinning AUD strength, with the pair trading around USD 0.6474, up 0.11% overnight.Key Movers
Overnight, the US Dollar Index (DXY) showed a mixed performance, initially retreating amid easing concerns over inflation and growing expectations of Federal Reserve rate cuts. However, it later regained some ground to close relatively flat, supported by steady U.S. Treasury yields and resilient economic data. The index fluctuated within a narrow range, reflecting a cautious market environment as investors weighed mixed signals from global economic indicators and central bank commentary. Overall, the US Dollar Index maintained a firm tone, balancing between pressure from dovish monetary policy expectations and underlying demand for safe-haven assets. US stocks experienced a modest rally, supported by optimism around easing inflation pressures and hopes for future Federal Reserve rate cuts. Major indexes like the S&P 500 and Nasdaq posted gains as investors responded positively to solid corporate earnings reports and upbeat economic data. However, trading remained somewhat cautious amid ongoing geopolitical tensions and mixed signals from the labor market.Expected Ranges
- AUD/USD: 0.6350 - 0.6550 ▲
- AUD/EUR: 0.5500 - 0.5700 ▲
- GBP/AUD: 2.0450 - 2.0650 ▼
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.8800 - 0.9000 ▼