Home Daily Commentaries Aussie dollar tests break above US$0.67 despite broad USD recovery

Aussie dollar tests break above US$0.67 despite broad USD recovery

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 17 May, 2024

Daily Currency Update

The Australian dollar held onto gains above US$0.6650 through trade on Thursday, testing a break above US$0.67. The AUD continued Wednesday's post CPI push through the early part of the local session, breaking above US$0.67 to mark intraday highs at US$0.6712, before domestic labour market data showed a surprise uptick in the unemployment rate through April. The unemployment rate rose to 4.1%, two tenths higher than markets anticipated. After Wednesday’s weaker than anticipated Wage Price Index report there are clear signs the labour market is softening. Australian rates fell and the AUD tracked toward session lows just above US$0.6655 before finding support. The AUD opens this morning buying US$0.6680 and our attentions turn now to China activity data, retail sales and April housing data, while Eurozone CPI data and commentary from key Fed and Bank of England officials dominate the offshore ticket and direction into the weekly close.

Key Movers

US Treasury yields rallied through trade on Thursday, retracing losses endured in the wake of Wednesday’s softer than anticipated CPI print, allowing the USD DXY index to creep higher on the day. Fed officials Williams, Barker and Mester all hit the wires, reiterating the Fed’s commitment to controlling inflation, doubling down on the mantra rates will be “higher-for-longer”. Against the backdrop, the Japanese yen underperformed and was the weakest of majors, giving up near 1% and allowing the USD to push back above 155. Japan GDP data contracted more than anticipated through Q1 on the heels of weak private consumption, complicating the outlook for monetary policy and highlighting the cap in central bank programs. Having given up all post CPI gains, markets again called into question the Bank of Japan’s resolve in tightening policy and intervening to protect the yen.

Our attentions today turn to China data, Eurozone CPI numbers and commentary from central bank officials for direction into the weekly close.

Expected Ranges

  • AUD/USD: 0.6620 - 0.6720 ▼
  • AUD/EUR: 0.6080 - 0.6180 ▼
  • GBP/AUD: 1.8800 - 1.9100 ▲
  • AUD/NZD: 1.0880 - 1.1020 ▼
  • AUD/CAD: 0.9050 - 0.9150 ▼

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.