Aussie dollar trades below US$0.66

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6572 at time of writing. The Aussie dollar witnessed a minor setback during Friday's session falling 0.30% after the Reserve Bank of Australia's (RBA) unwavering hawkish discourse and stronger Chinese inflation figures might limit the downside for the Aussie. Economists expect the Reserve Bank of Australia to deliver its first post-pandemic interest rate cut in February 2025, lowering the cash rate to 3.6 per cent by the end of next year. The RBA on Tuesday pushed back its timeline for getting inflation back to the mid-point of its 2 to 3 per cent target band until December 2026, six months later than forecast in May. The central bank cited a sharp rise in projected government spending as one of the reasons why growth was expected to pick up next year, keeping inflation higher for longer. On the data front in China, Friday's inflation report revealed the National Bureau of Statistics announced consumer prices rose by 0.5% in July YoY vs. the forecasts of 0.3%. Additional details revealed that the headline CPI soared 0.5% in July, the highest since February, moderating concerns about a profound economic slump in China. Looking ahead this week and on Tuesday we will see both the Westpac Consumer Sentiment and NAB Business Confidence. On Thursday the Australian Bureau of Statistics will release the latest monthly unemployment data which is expected to see the jobless rate remain steady at 4.1%. On Friday RBA Governor Michele Bullock is due to testify, along with Deputy Governor Andrew Hauser, Assistant Governor Sarah Hunter, and Assistant Governor Christopher Kent, before the House of Representatives Standing Committee on Economics, in Canberra.