Aussie dollar continues to trade above US$0.67
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Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.6767 at the time of writing. The Australian dollar has risen from just over 64 US cents in mid-April to around 67.50 US cents in recent days, and was buying 67.80 US cents on Friday evening. The AUD resumed its gains with market participants adjusting their stakes in the Federal Reserve (Fed) after the release of US inflation figures. Hot Producer Price Index (PPI) figures from the US didn’t trigger a recovery in the Greenback. Furthermore, China, one of Australia's closest trade partners, has announced its Trade Balance data for June showing a trade surplus of $99.05 billion, a significant increase from the previous figure of $82.62 billion. Looking ahead this week on the data front and all eyes will be on the Australian Bureau of Statistics Unemployment Rate decision on Thursday with the market forecasting a rise in the jobless rate from 4% to 4.1% in the previous month while adding an additional 20.2K jobs. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.Key Movers
In the US on Friday the Producer Price Index (PPI) for final demand in the US rose 2.6% YoY in June, according to data published by the US Bureau of Labor Statistics. This result was higher than the forecasted 2.3%, surpassing the previous 2.2% rise in May. Core PPI also exceeded market expectations at 3%. However, sentiment data from the University of Michigan came in below expectation at 66.0, compared to the predicted 68.5 and the previous 68.2. This reflects increasing discouragement among US consumers about the economic outlook. In addition to subsiding inflation, the labor market is also losing steam. The unemployment rate climbed to a 2-1/2-year high of 4.1% in June. With the Federal Reserve now wary of labor-market weakness, economists and financial markets are increasingly betting on a rate cut in September, with another reduction in borrowing costs expected in December. The central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range since last July. It has hiked its policy rate by 525 basis points since 2022. Wholesale goods prices dropped 0.5% last month after falling 0.8% in May, showing no impact from rising shipping costs. They were depressed by decreases in the prices of energy products, with gasoline declining 5.8% after dropping 7.3% in May. Food prices fell 0.3% after being unchanged in May. Egg prices, however, rebounded 55.9% after dropping 34.8% in May.Expected Ranges
- AUD/USD: 0.6650 - 0.6850 ▲
- AUD/EUR: 0.6100 - 0.6300 ▼
- GBP/AUD: 1.9050 - 1.9250 ▼
- AUD/NZD: 1.1000 - 1.1200 ▲
- AUD/CAD: 0.9150 - 0.9350 ▲