Home Daily Commentaries Aussie dollar holds steady around 67 US cents

Aussie dollar holds steady around 67 US cents

Tuesday 20 December, 2022

Daily Currency Update

The Australian dollar is steady this morning when valued against the Greenback. The AUD/USD pair seesawed around the 0.6700 mark on Monday as a short-term moving average defends the Australia Dollar buyers. At the time of writing the AUD/USD pair is currently trading at 0.6696. It was announced yesterday that Penny Wong will on Wednesday become the first Australian minister to visit China since the then-trade minister Simon Birmingham visited in November 2019. High-level lines of communication reopened between the government and the People's Republic of China after Labor's federal election win in May. Despite the easing of strict COVID-19 curbs in China, a sharp rise in new infections could delay the full reopening of the economy. It’s worth noting that the People’s Bank of China's (PBOC) defence of easy money policy also keeps the Australia Dollar firmer, due to the strong trade links between Australia and China. Looking ahead today we will see the release of the Reserve Bank of Australia (RBA) Monetary Policy Meeting Minutes a detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. On Wednesday the Melbourne Institute will release the monthly Leading Index which is designed to predict the direction of the economy. Finally, on Friday the Australian Treasury Department will release the Mid-Year Economic and Fiscal Outlook which compares the government's fiscal performance to the strategy outlined in the prior Annual Budget.

Key Movers

On Monday the run of negative US economic surprises continued with the release of the NAHB housing market index. Confidence among U.S. single-family home builders fell for a record 12th straight month in December as even a scramble to offer incentives for prospective buyers failed to boost traffic and lift sales in today's high-inflation, high-interest rate environment. The National Association of Home Builders on Monday announced the NAHB/Wells Fargo Housing Market Index dropped two points to 31 this month, falling short of the median estimate of 34 among economists' markets expectations. A reading above 50 indicates that more builders view conditions as good rather than poor. The US housing market has seen the most pronounced effects so far of the aggressive Federal Reserve interest rate hikes that are aimed at quashing inflation that continues to hold at unacceptably high levels. Interest rates on the most popular type of U.S. home loan topped 7% the highest since 2001 in October, and sales of new and existing homes tumbled by more than 30% from January through October.

Expected Ranges

  • AUD/USD: 0.6600 - 0.6800 ▼
  • AUD/EUR: 0.6200 - 0.6400 ▼
  • GBP/AUD: 1.8000 - 1.8200 ▲
  • AUD/NZD: 1.0450 - 1.0650 ▲
  • AUD/CAD: 0.9050 - 0.9250 ▲