Aussie dollar continues to trade above 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 0.6756 at time of writing. The Aussie dollar declined by 0.70% in Friday's session as the USD strengthened in response to July's Personal Consumption Expenditures (PCE) figures. Despite this, the Reserve Bank of Australia's (RBA) hawkish stance may limit further declines in the AUD. Last week Australia’s monthly Consumer Price Index (CPI) jumped by 3.5% in the year to July, compared to a 3.8% increase seen in June, according to the data published by the Australian Bureau of Statistics (ABS). The increase was slightly higher than the 3.4% economists had expected, suggesting interest rate cuts may still be months away. Looking ahead this week and today we will see the release of both monthly ANZ Job Advertisements and Building Approvals. On Tuesday the Australian Bureau of Statistics will release the latest current account figures which are directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country. On Wednesday the Australian Bureau of Statistics will release the latest Gross Domestic Product (GDP) which is forecast to lift from the previous quarter to 0.2%.Key Movers
Inflation edged higher in July, according to a measure favored by the Federal Reserve as the central bank prepares to enact its first interest rate reduction in more than four years. The Commerce Department reported Friday that the personal consumption expenditures price index rose 0.2% on the month and was up 2.5% from the same period a year ago, exactly in line with the Dow Jones consensus estimates. Excluding volatile food and energy prices, core PCE also increased 0.2% for the month but was up 2.6% from a year ago. The 12-month figure was slightly softer than the 2.7% estimate. The core PCE Price Index, which excludes volatile food and energy prices, has a significant impact on the market’s pricing of the Fed’s interest rates outlook. With increased confidence that inflation is on track to sustainably decline to the Fed’s target of 2%, officials are now worried about growing risks to US labor market strength. Currently, financial market participants expect that the Fed is almost certain to start reducing interest rates in September.Expected Ranges
- AUD/USD: 0.6650 - 0.6850 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.9300 - 1.9500 ▲
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.9000 - 0.9200 ▼