Aussie dollar trades below US$0.67
Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at US$0.66 at time of writing. On Friday, the Aussie faced severe selling pressure and the AUD/USD fell to its lowest level since early June towards the 0.6660 area, as Australia’s S&P Global PMIs for June registered mixed data on Friday. Preliminary readings of Australia’s S&P Global Manufacturing PMI for June rose past 48.1 market forecast and 48.4 previous readings to arrive at 48.6. Whereas the Services counterpart crossed the analysts’ estimations of 50.1 with 50.7, but slipped below 52.1 prior. With this, the S&P Global Composite PMI for the said month eased to 50.5 versus 51.6 prior. NZD/AUD continued to push higher towards 0.9200 and made steady gains through the last week, which leaves the cross almost 1.5% higher from the recent lows.On the local data front this week and all eyes will be on the Australian Bureau of Statistics Wednesday Consumer Price Index (CPI) release. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. On Thursday we will see the release of the monthly Retail Sales figures, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Finally on Friday the Reserve Bank of Australia will release the Private Sector Credit data, which measures the change in the total value of new credit issued to consumers and businesses.
Key Movers
On the data front, inflation in the US on Friday PMIs indicated mixed results for the US in the month of June, according to the S&P Global report. The Manufacturing PMI for June fell to a five-month low, reaching 46.3, failing to live up to the expectations of 48.3. On the positive side, the Services PMI came slightly above the expectations at 54.1 vs the 54 anticipated by markets. Moreover, the Global Composite PMI dropped to 53 vs the 54.4 expected. Looking ahead this week and all eyes will be on the release of Core Personal Consumption Expenditures (PCE) and Gross Domestic Product (GDP) data from the US, where investors will get a clearer outlook of the economic activity and inflation in order to start modeling their expectations towards the next Fed meeting in July.Global equity markets fell on Friday, contributing to the largest weekly pullback since the US regional banking crisis began in March amid concerns about the growth outlook. The S&P lost 0.8%, resulting in a weekly pullback of nearly 2%. Dow -0.7%, S&P -0.8%, and Nasdaq -1%. The yield on the US 10-year note slid 6 basis points to 3.73 per cent at 4.59pm in New York. Government bond yields tumbled across the Americas and Europe as recession worries spiked.
Expected Ranges
- AUD/USD: 0.6550 - 0.6750 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.8850 - 1.9150 ▲
- AUD/NZD: 1.0750 - 1.0950 ▼
- AUD/CAD: 0.8700 - 0.8900 ▼