Home Daily Commentaries AUD stumbles on attempt to break above US$0.67

AUD stumbles on attempt to break above US$0.67

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Tuesday 21 May, 2024

Daily Currency Update

The Australian dollar edged lower through trade on Monday, unable to extend gains beyond US$0.67. Having marked intraday highs at US$0.6708 during the domestic session the AUD tracked lower overnight, sliding back below US$0.6670. Early gains were underpinned by an uptick in key metal prices with Gold and Copper surging to start the week before tapering through European and US trade.

With little else on hand to drive direction metals performance drove direction on the day with markets content on monitoring positions ahead of Westpac consumer sentiment data and Tuesday's RBA minutes. We expect consumer confidence to remain strained amid ongoing inflation and cost of living pressures while the RBA minutes will potentially offer a greater insight into policymakers' outlook and the monetary policy plans moving into H2.

The AUD has enjoyed a run of higher highs and higher lows through the last two weeks, we are keenly attuned to any signs of a consolidated extension above US$0.67 as a key technical marker that could propel the AUD into a higher channel.

Key Movers

The USD started the week on the front foot, advancing against most counterparts amid an uptick in US treasury yields. While the euro and British pound showed little net movement, the JPY was again a notable underperformer. The USD pushed back above 156 and appears set to test BoJ and MoF resolve, seeking to extend gains despite reports the BoJ plans to ease its Quantitative Easing program further and yield curve controls.

With US Treasury Yields trading higher across the curve, yen weakness followed and we are keenly attuned to any signs of intervention as the USD creeps back toward 160. Our focus today turns to Canadian CPI data. We expect price pressures to continue moving back toward the Bank of Canada's 1-3% target.

A softer print will likely elevate calls for a June rate cut and could weigh on the CAD. With little else on the docket, the Fed and Bank of England speakers could shape direction, yet we expect few surprises and anticipate most will stick to the message.

Expected Ranges

  • AUD/USD: 0.6600 - 0.6720 ▼
  • AUD/EUR: 0.6050 - 0.6180 ▼
  • GBP/AUD: 1.8900 - 1.9200 ▲
  • AUD/NZD: 1.0880 - 1.1020 ▲
  • AUD/CAD: 0.9050 - 0.9150 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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