Aussie dollar trades back below US$0.67
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6620 at the time of writing. The Australian dollar lost 0.20% against the US dollar for the third straight day on Friday as investors digested the latest S&P Global PMI report in the US. The first support for AUD/USD is at 0.6600. If this level is breached, it will expose the 100-day moving average (DMA) at 0.6562, followed by the 50 and 200-DMAs at 0.6553 and 0.6526, respectively. Last week on the data front the Reserve Bank of Australia (RBA) published the Minutes of its May monetary policy meeting highlighting that the board members considered whether to raise rates and judged the case for steady policy as the stronger one. Additional details of the RBA Minutes suggest that the board agreed it was difficult to either rule in or rule out future changes in the cash rate. However, even as the central bank considered the case for a rate hike at its May meeting, the RBA board ultimately kept the cash rate on hold at a 12-year high of 4.35 per cent, citing that recent data still pointed to an easing in inflation. Markets ascribe a 50 per cent chance of a cut at the RBA’s December meeting, and are fully priced for a 25 basis point cut by April 2025. Looking ahead this week and on Tuesday the Australian Bureau of Statistics will release the latest monthly retail sales figures. On Wednesday all eyes will be on the release of the Consumer Price Index (CPI) which is expected to fall from 3.5% to 3.4%. Finally, on Thursday we will see the release of the monthly building approvals.Key Movers
Last week US business activity accelerated in early May at the fastest pace in two years, largely reflecting stronger growth at service providers and accompanied by a pickup in inflation. The US S&P Global Composite PMI improved to 54.4 in May's flash estimate, up from 51.3, indicating that business activity in the US private sector continued to grow at a faster pace than in April. Meanwhile, the S&P Global Manufacturing PMI increased to 50.9 from 50.0 over the same period, signaling an expansion in the manufacturing sector. Additionally, the S&P Global Services PMI rose to 54.8 from 51.3. Durable Goods Orders in the US increased by 0.7% in April after March’s figures were revised down steeply to 0.8%. April’s reading exceeded market predictions, which expected a drop of 0.8%. The Federal Reserve remains mindful of premature easing with Fed members implying that the policy rate limitation will continue for a prolonged period. Market probabilities for a rate cut in the upcoming meetings are around 50% in September and 85% in November, with a cut priced in by December. Looking ahead this week and on Wednesday we will see the release of the CB Consumer Confidence. On Thursday the Department of Labor will release the latest Unemployment claims. Finally, on Friday the Bureau of Economic Analysis will release the latest both the Personal Consumption Expenditures (PCE) and Consumer Price Index (CPI) reports.Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.9050 - 1.9250 ▲
- AUD/NZD: 1.0700 - 1.0900 ▼
- AUD/CAD: 0.8900 - 0.9100 ▼