Aussie dollar trading below US$0.64
Written by
Daily Currency Update
The Australian dollar is weaker this morning when valued against the Greenback currently trading at 0.6372 at time of writing. The AUD/USD pair experienced significant weakness on Friday, sinking near its August lows after the release of the US Nonfarm Payrolls (NFP) report for November. On the data front last week Australia's economy grew by 0.3 per cent in the September quarter, and 0.8 per cent over the year, according to the Australian Bureau of Statistics (ABS). It means the economy's annual growth rate has weakened even further from the extremely weak growth recorded in the June quarter. Some economists were expecting the annual rate of growth to pick up from 1 per cent, but Wednesday's figures show the economy has continued to slow down since the middle of the year, to an anemic 0.8 per cent. Looking ahead this week and on Tuesday the Reserve Bank of Australia (RBA) will have a monetary policy meeting. The central bank will announce its decision, and it is widely anticipated that interest rates will be kept on hold. The Official Cash Rate (OCR) has been steady at 4.35% since November 2023, when the RBA delivered its latest interest rate hike. Growth in Australia has been tepid, and RBA’s Governor Michele Bullock should take note of that. The earliest a rate cut is expected, however, is February 2025, with mounting bets it could be delayed up to March.Key Movers
The US dollar Index (DXY), which measures the value of the USD against a basket of currencies, gained toward 106.00 on Friday, driven by several key movers. The US dollar remained flat after the release of Nonfarm Payrolls (NFP) data, while markets anticipated a potential December rate cut by the Federal Reserve (Fed). On the data front, the US published the November Nonfarm Payroll (NFP) report. The headline figure showed 227K new jobs were added in the month, higher than the 200K anticipated by market analysts. Also, the Unemployment Rate ticked marginally higher, from 4.1% previously to the expected 4.2%. The NFP report also showed that the Labor Force Participation Rate edged lower to 62.5%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, held steady at 4%, coming in above the market forecast of 3.9%. The uptick in inflationary pressures fueled bets of an upcoming December rate cut, now at roughly 83% from 71% on Thursday. The Dow Jones Industrial Average (DJIA) turned lower on Friday, shedding another 140 points and dragging the equity index into the low end. While Amazon (AMZN) stock is up for the sixth consecutive session on Friday, a streak that began on November 29. What’s more, AMZN stock has advanced in eight out of the last nine sessions. Since then the world’s largest ecommerce platform has gained 14.1% or nearly $300 billion in market cap.Expected Ranges
- AUD/USD: 0.6300 - 0.6500 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9700 - 1.9900 ▲
- AUD/NZD: 1.0700 - 1.0900 ▼
- AUD/CAD: 0.8900 - 0.9100 ▼