Aussie dollar holds on to 69 US cents

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar finishes Friday’s session with minimal losses down 0.22%. Market participants ramped up expectations for additional interest rate increases by the RBA, which hiked rates by 25 bps on Tuesday, and stated that further tightening would be needed after lifting rates to the 3.35% threshold. Last week's combination of supporting factors assists the US Dollar to stand tall near a one-month high, which exerts some downward pressure on the AUD/USD pair. Against the backdrop of hawkish signals from Fed officials, a fresh wave of the global risk-aversion trade provides a lift to the safe-haven buck. Investors remain worried about economic headwinds stemming from rapidly rising borrowing costs. Adding to this, the deeply inverted US Treasury yield curve point to growing concerns about looming recession risks. This is seen as another factor that contributes to driving flows away from the risk-sensitive Aussie.
Looking ahead this week and on Monday there are no scheduled releases. On Tuesday we will see the release of the Westpac Consumer Sentiment. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. We will also see the release of the National Australia Bank (NAB) Business Confidence survey of about 350 businesses which asks respondents to rate the relative level of current business conditions. On Wednesday Reserve Bank of Australia (RBA) Governor Philip Lowe is due to testify before the Senate Economics Legislation Committee, in Canberra. Volatility is often experienced during his speeches as traders attempt to decipher interest rate clues. Finally, on Thursday the Australian Bureau of Statistics will release the Unemployment data which is expected to remain steady at 3.5%.