Aussie dollar continues to trade above 67 US cents
Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback, currently trading at 0.6750 at time of writing. AUDUSD continues to rally as it climbs from the bottom it formed on September 11. The AUDUSD pair surged towards the US$0.6800 level following the Federal Reserve's decision to cut interest rates by 50 basis points. Yesterday, The Conference Board's Leading Economic Index (LEI) for Australia was up by 0.1% in July 2024 to 112.1 (2016=100), a partial reversal of the revised decrease of 0.2% in June. The LEI fell by 2.3% over the six-month period from January to July 2024. This index is designed to predict the direction of the economy, but it tends to have a muted impact because most of the indicators used in the calculation are released previously.Looking ahead this week and on Thursday the Australian Bureau of Statistics will release the latest monthly Unemployment Rate figures which is expected to remain steady at 4.2%. Any job gains will probably discourage the RBA from cutting its key interest rate in the near term. There are no other scheduled releases this week.
Key Movers
The US Federal Reserve has cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates helped tame inflation, but that also made borrowing painfully expensive for American consumers. The rate cut, the Fed's first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing. Policymakers voted 11-to-1 in favour of lowering the US central bank’s benchmark rate to between 4.75% and 5.00%, the Fed announced in a statement. Stocks surged in reaction to the news, as the central bank’s move confirms recent bets on Wall Street that the central bank would opt for a jumbo interest rate cut over a quarter-point cut. The Fed said its rate-setting committee “has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” Looking ahead, the Fed has indicated the possibility of two to three additional 25 basis point rate cuts in the upcoming meetings of 2024, underscoring the committee's cautious stance amidst an uncertain economic outlook.Expected Ranges
- AUD/USD: 0.6650 - 0.6850 ▲
- AUD/EUR: 0.5950 - 0.6150 ▲
- GBP/AUD: 1.9400 - 1.9600 ▲
- AUD/NZD: 1.0750 - 1.0950 ▲
- AUD/CAD: 0.9100 - 0.9300 ▲