Home Daily Commentaries Aussie dollar continues to trade lower due to risk aversion sentiment

Aussie dollar continues to trade lower due to risk aversion sentiment

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Friday 4 October, 2024

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.6836 at time of writing. AUD/USD saw its selling bias gather extra steam on Thursday. That said, the pair broke below the key 0.6900 support to hit new multi-day lows near 0.6830. Extra losses could see AUD/USD drop to the interim 55-day and 100-day SMAs at 0.6699 and 0.6685, respectively, prior to the September low. On the local front yesterday, the Balance of Trade in Australia printed a surplus in August, which exceeded estimates of AU$5.5 billion, coming at AU$5.64 billion, up from July’s AU$5.636 billion. Besides that, Australia’s Judo Bank Services Purchasing Managers Index (PMI) decelerates from 52.5 to 50.5 in September. This could refrain the Reserve Bank of Australia (RBA) from adopting a hawkish stance amid concerns that the economy is cooling. Looking ahead today and the Australian economic docket will feature Home Loans and Investment Lending for Homes in August.

Key Movers

The US dollar traded higher on Thursday after former president of Federal Reserve Bank of New York, William Dudley commented on Bloomberg television that a 25 basis point rate cut is the only healthy way forward. This diminishes chances of another large interest-rate cut by the US Federal Reserve (Fed) in November. On the local front, there were 225,000 initial jobless claims in the week ending September 28, the weekly data published by the US Department of Labor (DOL) showed on Thursday. This print followed the previous week's print of 219,000 (revised from 218,000) and came in slightly worse than the market expectation of 220,000. September S&P Global Services PMI was recorded at 55.2, slightly below the expected and previous value of 55.4. Additionally, the U.S. September S&P Global Composite PMI was finalised at 54, which is lower than the anticipated 54.3 and the prior value of 54.4. Looking ahead, investors are anticipating Friday’s upcoming Non-farm Payrolls (NFP) jobs print.

Expected Ranges

  • AUD/USD: 0.6750 - 0.6950 ▼
  • AUD/EUR: 0.6100 - 0.6300 ▼
  • GBP/AUD: 1.9100 - 1.9399 ▼
  • AUD/NZD: 1.0900 - 1.1100 ▲
  • AUD/CAD: 0.9150 - 0.9350 ▲

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.

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