Aussie dollar holds above US$0.66
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Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.6651 at the time of writing. The AUD/USD pair traded about a half of a percent higher on Friday as the Aussie dollar continues to rise following a bounce from the May 24 swing lows. Last week on the data front Australia’s CPI rose by 3.6% y/y in April, up from 3.5% in March and higher than the market estimate of 3.4%. This was the highest reading since last November and was driven by higher food prices and clothing. Core CPI, which excludes food and energy, remained unchanged at 4.1%. This marks the second straight month that CPI accelerated and beat the estimate and that could give the Reserve Bank of Australia reason to delay rate cuts. The RBA, like other major central banks, has slashed inflation but is having a difficult time in the “final stretch” as the target range of 2-3% remains elusive. Looking forward to this week and Today we will see the release of the monthly ANZ Job Advertisements and yearly Index of Commodity Prices. On Tuesday the Australian Bureau of Statistics will release the latest Current Account figures. It's 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 all eyes will be on the release of the quarterly Gross Domestic Product (GDP) which is expected to remain steady at 0.2%. It's the broadest measure of economic activity and the primary gauge of the economy's health. Finally, on Thursday we will see the release of the monthly Goods Trade Balance.Key Movers
On the data front on Friday U.S. inflation tracked sideways in April, a worrying sign for the U.S. central bank that suggests the elevated pace of price increases could last longer than expected and casts doubt on how soon it will be able to cut interest rates. The personal consumption expenditures (PCE) price index increased 0.3% last month, the Commerce Department said on Friday, matching the unrevised gain in March. The PCE price index rose 2.7% year on year, after advancing 2.7% in March. Economists polled by Reuters had forecast it would climb 0.3% on the month and 2.7% on a year-on-year basis. Core PCE subtracting food and energy prices, rose 0.2% month to month, less than the forecast repeat of March's 0.3% rise. In the 12 months to April, the core index rose 2.8%, the same as expected and as last month's rise. Looking ahead next week and investors will focus on the Manufacturing and the Services PMI, which will be published by the Institute of Supply Management (ISM) and the Nonfarm Payrolls (NFP) for May.Expected Ranges
- AUD/USD: 0.6550 - 0.6750 ▲
- AUD/EUR: 0.6000 - 0.6200 ▲
- GBP/AUD: 1.9050 - 1.9250 ▼
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.8950 - 0.9150 ▲