Home Daily Commentaries AUD extends rebound as RBA doubles down on hawkish tone

AUD extends rebound as RBA doubles down on hawkish tone

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Friday 9 August, 2024

Daily Currency Update

The Australian dollar recovery continued through trade on Thursday, buoyed by improving risk sentiment and hawkish RBA soundbites. RBA Governor Michelle Bullock doubled down on the RBA’s hawkish stance, saying the board “remain vigilant” when considering the upside risks of inflation, reiterating that inflation is still far too high. She affirmed the board's commitment to controlling price pressures and stated, “We will not hesitate to raise rates if we need to”. Bullock did acknowledge such comments would not be welcome news, but stressed the alternative costs of higher inflation are worse. The AUD pushed back through US$0.6550 and found added support overnight, extending toward US$0.6590, following better than expected US jobless claims. Having touched highs just short of US$0.6595, the AUD opens this morning at US$0.6593, closing yesterday as the strongest performing major.

Our attentions remain with the broader risk narrative, while Fed commentary, China inflation data and Canadian employment data are key markers guiding direction into the weekly close.

Key Movers

When compared with the fireworks of the last week, price action among majors on Thursday was somewhat muted. The US dollar DXY index enjoyed a short lived boost on the heels of better than expected jobless claims data. After last week's lacklustre non-farm payrolls print, attentions were keenly attuned to weekly unemployment claims. Jobless claims fell more than expected, allaying fears of a more rapid economic slowdown and deterioration of the labour market. US yields rallied and calls for the Fed to cut rates by as much as 50 basis points in September were pared back. The euro pushed toward 1.0950 before sliding back to 1.0920, closing flat on the day, while GBP tracked between 1.2740 and 1.2770. With risk aversion fading following Monday’s flash crash, the yen and Swiss franc underperformed, while commodity currencies edged higher.

Our attentions turn now to Fed commentary, China inflation data and Canadian employment data as key markers guiding direction into the weekly close.

Expected Ranges

  • AUD/USD: 0.6480 - 0.6620 ▲
  • AUD/EUR: 0.5950 - 0.6050 ▲
  • GBP/AUD: 1.9200 - 1.9500 ▼
  • AUD/NZD: 1.0880 - 1.1020 ▲
  • AUD/CAD: 0.8950 - 0.9100 ▲

Written by

Matt Richardson

OFXpert

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.

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