AUD resilient in face of USD push to fresh 2024 high
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Daily Currency Update
The Australian dollar was among the better performers through trade on Thursday, advancing against the USD and other majors. While the USD surged toward fresh year-to-date highs, the AUD proved resilient edging back through US$0.65, marking intraday highs at US$0.6530. With little of note on the domestic macroeconomic ticket, the AUD received a boost from another uptick in iron ore prices, while gold and oil also benefited from escalating tensions between Russia and Ukraine. The iron ore price jumped six-tenths of a per cent, consolidating its positions above US$100 per ton, as other base metals continue to falter.Having suffered a sharp decline since the US election, the AUD has found support this week and is comfortably holding above US$0.6450. While risks remain skewed to the downside and our medium term outlook depends heavily on how far President-elect Trump is willing to push his US first policy mandate, we do see scope for some consolidation at these levels. That said, a consolidated break below US$0.6450 opens the door for a downward push toward October 2023 lows and a new range south of US$0.64.
Our attentions today turn to Global PMI data release, Japan CPI data and ongoing political headlines.
Key Movers
The euro has been the big mover through the last 24 hours, tumbling to its lowest level in 13 months amid French political instability, dovish ECB commentary and another escalation in the Russia/Ukraine war. Russia is reported to have launched a new ballistic missile into Ukraine, striking the city of Dnipro, further escalating tensions as the threat of nuclear weapons looms.In France, Marine Le Pen, leader of the National Assembly and Far Right national Rally party, warned Premier Michel Barnier that if demands for budget amendments were not met she would have no choice but to call a no confidence vote. There has been growing opposition within the National Assembly to this latest budget with hundreds of amendments put forward, yet it appears Barnier will utilise constitutional powers to push the budget through. In such an instance, we will likely see a no confidence vote called and with French political stability exposed at June’s snap election, the prospect of another hung parliament looms large.
The euro fell below 1.05, sliding to its worst level since October 2023 touching 1.0462, spilling over into the GBP and allowing the US dollar index to mark another 2024 high. Our attentions turn now to Japan CPI data, US, UK and euro area PMI’s, UK retail sales and US consumer sentiment as key macro drivers. Political and geopolitical headlines through Europe and the US continue to steer sentiment into the weekly close.
Expected Ranges
- AUD/USD: 0.6400 - 0.6600 ▲
- AUD/EUR: 0.6150 - 0.6250 ▲
- GBP/AUD: 1.9200 - 1.9500 ▼
- AUD/NZD: 1.1050 - 1.1180 ▲
- AUD/CAD: 0.9050 - 0.9150 ▲