OFX Daily & Weekly Market News Feed

Aussie dollar trades above US$0.69

Fri, 27 Sep 24 00:00:00 +0000

AUD - Australian dollar

The Australian dollar is stronger this morning when valued against the Greenback, currently trading at 0.6893 at time of writing. The AUD/USD pair bounced back strongly from Wednesday’s low of 0.6820 to near the round-level resistance of 0.6900 in Thursday’s North American session. The Aussie dollar is well supported this week after the Reserve Bank held the cash rate at 4.35 per cent following its board meeting on Tuesday, flagging that inflation is “still too high”. The Reserve Bank of Australia (RBA) is expected to leave interest rates at their current levels for the entire year. On Wednesday, the Australian Bureau of Statistics announced that Australia’s inflation rate is within the RBA’s target range for the month of August, easing from 3.5% in July to 2.7%. Australia’s hawkish approach appears at odds with the U.S. Federal Reserve. The Fed last Wednesday had moved to cut rates by 50 basis points, despite the latest inflation reading in August at around 2.5%, above the U.S. central bank’s target of 2%.

Key Movers

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, is flat after a muted market reaction to a slew of robust US economic data. The DXY is trading at 100.88 at the time of writing. On the data front, U.S. economic growth accelerated in the second quarter amid strength in consumer spending, the government confirmed on Thursday. Gross domestic product (GDP) increased at an unrevised 3.0% annualised rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its third estimate of second-quarter GDP on Thursday. This aligns with economists expectations, as polled by Reuters. Growth in the first quarter was revised up to a 1.6% rate from 1.4%. Meanwhile, initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 218,000 for the week ended Sept. 21, the lowest level since mid-May, the Labor Department said. Economists polled by Reuters had forecast 225,000 claims. Unadjusted claims dropped by 5,957 to 180,878 last week. New orders for US manufactured durable goods rose by a marginal $0.1 billion to $289.7 billion, marking the sixth increase in seven months.

Expected Ranges

AUD/USD: 0.6800 - 0.7000 ▲

AUD/EUR: 0.6050 - 0.6250 ▲

GBP/AUD: 1.9300 - 1.9500 ▼

AUD/NZD: 1.0800 - 1.1000 ▲

AUD/CAD: 0.9150 - 0.9350 ▲

Aussie dollar continues to trade above 68 US cents

Thu, 26 Sep 24 00:00:00 +0000

AUD - Australian dollar

The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at US$0.6815 at time of writing. The AUDUSD pair's decline came as the US dollar regained its safe-haven appeal amidst persistent global economic concerns. Despite the weaker Australian Consumer Price Index (CPI) data, near-term rate cuts from the Reserve Bank of Australia (RBA), remain unlikely. Last month, Australian Inflation dived to its lowest rate in 3 years as the government's cost-of-living relief and cheaper petrol helped household budgets, but the RBA will likely wait for a more sustained drop before it starts cutting interest rates. Headline consumer price inflation in August was 2.7%, the lowest reading since August 2021, according to the Australian Bureau of Statistics report, released on Wednesday. The underlying inflation measure, which strips out more volatile price movers, also fell. Known as the trimmed mean, this gauge came in at 3.4%, down from July’s 3.8%. RBA Governor Michele Bullock indicates that recent data has not significantly affected the policy outlook, reinforcing the hawkish stance and limiting the AUDUSD downside.

Key Movers

The US dollar Index (DXY), which measures the value of the USD against a basket of currencies, whipsaws in a volatile session on Wednesday, hovering around a 14-month low due to intensifying recession fears. All eyes will be on Friday’s Personal Consumption Expenditures (PCE) figures from August. Core PCE is expected to remain unchanged at 0.2% month-on-month, while headline PCE may ease to 0.1% month-on-month versus the 0.2% prior. Components in the Consumer Price Index (CPI) and Producer Price Index (PPI) data that feed into PCE have also suggested broad pricing pressures under control. Gold price remains steadily above $2,650 for the second straight session on Wednesday as traders increased the odds for another big interest rate cut by the Federal Reserve (Fed) at the upcoming November meeting. Adding to that, high US Treasury yields kept the XAUUSD from rising further, mostly trading near $2,660. Bullion has risen over 29% so far in 2024, with gains attributed to central bank easing and geopolitical issues.

Expected Ranges

AUD/USD: 0.6700 - 0.6900 ▼

AUD/EUR: 0.6000 - 0.6200 ▼

GBP/AUD: 1.9400 - 1.9600 ▲

AUD/NZD: 1.0750 - 1.0950 ▲

AUD/CAD: 0.9100 - 0.9300 ▼

Aussie dollar trades rallies above US$0.68

Wed, 25 Sep 24 00:00:00 +0000

AUD - Australian dollar

The Australian dollar is stronger this morning when valued against the Greenback currently trading at US$0.6890 at the time of writing. The AUD/USD pair rallied to a three-month high. The Aussie dollar gained ground after China's massive stimulus boost to revive household spending, real estate demand, and economic growth. The Reserve Bank of Australia (RBA) held rates steady and maintained a hawkish posture. The Reserve Bank has held the cash rate at 4.35 per cent following its board meeting on Tuesday, flagging that inflation is “still too high”. The seventh consecutive hold was widely tipped by economists and investors, which means homeowners will be slugged with the 13-year high cash rate until at least November 5, when the board is slated to meet next. In a statement, the RBA acknowledged inflation had “fallen substantially” but it was still beyond the “midpoint” of the board’s target band of 2 to 3 per cent. For now, the hawkish RBA is supporting the Australian dollar.

Key Movers

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, posted some losses on Tuesday after the release of the Conference Board’s Consumer Confidence data. US Consumer Confidence unexpectedly plunged in September, falling below expectations to 98.7. The Conference Board revealed that Consumer Confidence declined in September, hitting its lowest level since August 2021, due to growing concerns about the labor market and the overall economic outlook. Gold prices hit a new all-time high (ATH) during Tuesday's North American session. The XAU/USD trades at $2,651 after reaching an ATH of $2,655. All three of the major indexes closed higher on Tuesday, with the Dow Jones Industrial Average and S&P 500 both ending the day at record highs. Going forward, investors will focus on commentaries from Fed officials and the United States (US) Personal Consumption Expenditure Price Index (PCE) for August, which will be published on Friday.

Expected Ranges

AUD/USD: 0.6800 - 0.7000 ▲

AUD/EUR: 0.6050 - 0.6250 ▲

GBP/AUD: 1.9350 - 1.9550 ▲

AUD/NZD: 1.0750 - 1.0950 ▼

AUD/CAD: 0.9150 - 0.9350 ▼

Aussie dollar trades back above US$0.68

Tue, 24 Sep 24 00:00:00 +0000

AUD - Australian dollar

The Australian dollar is stronger this morning when valued against the Greenback, currently trading at US$0.6835 at the time of writing. The Aussie dollar rallied above US$0.6800 in Monday’s European session, outperforming its major counterparts ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision, which will be announced today. The RBA's hawkish policy outlook and the release of preliminary S&P Global PMI data for September from the US were the primary movers of the pair.

On the data front yesterday, business activity in Australia’s private sector declined in September amid a sustained manufacturing downturn. The Judo Bank flash Australia Composite PMI Output Index posted 49.8 in September, down from 51.7 in August. Falling below the 50.0 neutral mark, the latest data signalled that business activity declined in September after rising in August as slower services activity growth failed to offset a sharper downturn in manufacturing production. However, the rate of decline was marginal.

Looking ahead today, all eyes will be on the RBA's interest rate decision, which is expected to leave rates on hold at 4.35%.

Key Movers

Last week the Federal Reserve (Fed) cut its benchmark interest rate by 50 basis points (bps), marking the first reduction in four years. The half-point move signals that the Fed is acting aggressively to keep the US economy from stalling. The US economy is showing signs of deceleration, but there are also signs of the economic activity holding resilient. The Fed has stated that the pace of the easing cycle will depend on the incoming data.

U.S. business activity was steady in September, however average prices charged for goods and services rose at the fastest pace in six months, potentially hinting at a pick-up in inflation in the coming months. S&P Global said on Monday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, was little changed at 54.4 this month, compared to a final reading of 54.6 in August. A reading above 50 indicates expansion in the private sector.

September's reading aligns with reports this month, including retail sales, that have suggested the economy maintained its solid growth momentum in the third quarter. The survey's measure of prices paid by businesses for inputs increased to a one-year high of 59.1, from 57.8 last month. Its gauge of prices charged rose to 54.7 from 52.9 in August. Rising costs, mostly in the services sector linked to wage raises, were attributed to the increase.

At face value, this would suggest that price pressures were building up again, but there is growing evidence that inflation is cooling. The survey's flash manufacturing PMI dropped to a 15-month low of 47.0 from 47.9 in August. Economists polled by Reuters had forecast the index for the sector, which accounts for 10.3% of the economy, rising to 48.5. Its flash services PMI dipped to 55.4 from 55.7 in August, broadly in line with economists' expectations for a reading of 55.2.

Expected Ranges

AUD/USD: 0.6700 - 0.6900 ▲

AUD/EUR: 0.6050 - 0.6250 ▲

GBP/AUD: 1.9400 - 1.9600 ▼

AUD/NZD: 1.0800 - 1.1000 ▲

AUD/CAD: 0.9150 - 0.9350 ▼

Aussie dollar trades below US$0.68

Mon, 23 Sep 24 00:00:00 +0000

AUD - Australian dollar

The Australian dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6789 at time of writing. The AUD/USD declined by 0.40% in Friday's session, pressured by growing expectations of interest rate cuts by the Federal Reserve (Fed). Despite the mixed Australian economic outlook, the Reserve Bank of Australia's (RBA) hawkish stance on inflation has led to market expectations of a modest 25-basis-point rate cut in 2024. Last week on the data front Australia’s Unemployment Rate remained at 4.2% in August, compared with the expectations and the previous figure of 4.2%, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday. Furthermore, the Australian Employment Change arrived at 47.5K in August from 48.9K (revised from 58.2K) in July, compared with the consensus forecast of 25.0K. Looking ahead this week and today we will see the release of the Flash Manufacturing and Services PMI's. On Tuesday all eyes will be on the Reserve Bank of Australia's (RBA) interest rate decision which is expected to leave rates on hold at 4.35%. On Wednesday the Australian Bureau of Statistics will release the Consumer Price Index (CPI) figures for the month. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

Key Movers

The US dollar remains under pressure as expectations grow for additional rate cuts by the US Federal Reserve by the end of 2024. The latest dot plot projections indicate a gradual easing cycle, with the median rate for 2024 revised down to 4.375% from the June forecast of 5.125%. The Fed delivered its first interest rate cut decision in more than four years last Wednesday, in which it reduced its key borrowing rates by 50 basis points (bps) to 4.75%-5.00%. The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, pointing to solid job growth in September and offering confirmation that the economy continued to expand in the third quarter. Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 219,000 for the week ended Sept. 14, the lowest level since the middle of May, the Labor Department said last Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week. The stock market took a breather Friday with the Dow Jones Industrial Average eked out a 0.1% gain to close at a record high for the second consecutive session. The S&P 500 slid 0.2% from its own record high. The Nasdaq Composite, about 4% off its all-time high, dipped 0.4%. All three indexes advanced about 1.5% over the week. Gold prices climbed past $2,600, recording new all-time highs amid increasing speculation that the Federal Reserve (Fed) will continue to lower borrowing costs.

Expected Ranges

AUD/USD: 0.6700 - 0.6900 ▼

AUD/EUR: 0.6000 - 0.6200 ▲

GBP/AUD: 1.9400 - 1.9600 ▼

AUD/NZD: 1.0800 - 1.1000 ▲

AUD/CAD: 0.9100 - 0.9300 ▼