Home Daily Commentaries Limited action across majors as focus on US inflation update Thursday

Limited action across majors as focus on US inflation update Thursday

Daily Currency Update

The Australian dollar tracked within a narrow range through trade on Tuesday as investors seem content in squaring positions ahead of another critical US inflation update. Markets largely ignored the Westpac consumer sentiment report and NAB business confidence survey despite both indicating a further deterioration in activity and confidence. We had hoped that planned tax cuts and fiscal support introduced on July 1 might boost consumer sentiment. Still, it appears concerns surrounding the cost of living and another potential RBA rate hike have consumers tightening their belts and businesses preparing for an extended downturn in activity. Having bounced between US$0.6724 and US$.6748 the AUD opens this morning at US$0.6741. Our attention now turns to the RBNZ policy meeting and rate statement. With calls for policy makers to consider a rate cut as early as September growing, we are keenly attuned to any shift in RBNZ rhetoric.

Key Movers

Price action was well contained through trade on Tuesday with majors operating within a narrow range against the USD as investors square positions leading into tomorrow’s all-important US CPI inflation update. Markets largely ignored commentary from Fed Chari Jerome Powell as he addressed a senate committee hearing on monetary policy. Powell was not prepared to give any clear guidance as to the time and trajectory of potential rate cuts and as such market pricing for a July adjustment reflects expectations that a cut is highly unlikely. Instead, we look to September as the first realistic Fed meeting wherein a rate cut is in play. Before then we have 3 inflation prints and 2 labour market updates. These will prove key in shaping expectations and will drive near-term direction across majors. US yields were higher across the curve with both 10 and 2 year rates edging upward, helping prop up the USD and add pressure on the Yen. The Japanese yen was the worst-performing major unit giving up three-tenths of a percent, allowing the USD to break back above ¥161.30 and mark highs at ¥161.31. the euro held on above US$1.08 and bounced between US$1.0805 and US$1.0835 while the British pound edged below US$1.28 marking session lows at US$1.2778.
Our attention now turns to the RBNZ policy meeting and rate update ahead of commentary from Bank of England and European Central Bank officials and Powell’s 2nd day of testimony in front of the Senate committee.

Expected Ranges

  • AUD/USD: 0.6680 - 0.6780 ▲
  • AUD/EUR: 0.6180 - 0.6250 ▲
  • GBP/AUD: 1.8850 - 1.9050 ▼
  • AUD/NZD: 1.0880 - 1.1050 ▼
  • AUD/CAD: 0.9150 - 0.9250 ▲

Written by

Matt Richardson


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.