Home Daily Commentaries AUD a top performer following hawkish RBA update

AUD a top performer following hawkish RBA update

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.

| Wednesday 19 June, 2024

Daily Currency Update

The Australian dollar outperformed through trade on Tuesday, buoyed by softer US retail sales and a hawkish RBA. As expected the RBA left rates on hold, but the tone of the accompanying rate statement and press conference helped fuel AUD gains. Governor Bullock affirmed the bank’s commitment to suppressing inflation and the need to “remain vigilant to the upside risk of inflation”. Bullock advised a rate hike was discussed among policymakers while a rate cut was not. Domestic rates pushed higher following the announcement, dragging the AUD through US$0.6650. Softer than expected US retail sales helped the AUD consolidate gains and we opened this morning just short of US$0.6660.
Our attention now turns to UK CPI data. We expect to see a decline back toward 25 supporting calls for a Bank of England Rate cut in June. With the Bank of England meeting tomorrow this latest inflation outlook will prove key in shaping near-term direction and risk demand.

Key Movers

Softer US retail sales and a decline in US treasury yields drove the USD lower through trade on Tuesday with the USD DXY index down nearly two-tenths of a percent. The USD is facing increasing headwinds from softer local data prints and as we creep toward a Federal Reserve Rate cut we expect to see further US dollar weakness. That said safe haven support throughout June should remain intact as market volatility elevates amid European political uncertainty. Attentions remain affixed to the French election race. The euro traded flat for the day hovering near US$1.0750 while the GBP edged above US$1.27 and the yen staved off attempts to consolidate a break above ¥158 having given up intraday highs at ¥158.20.
Our focus now turns to UK CPI data ahead of the Bank of England Policy meeting tomorrow and a slew of European and US manufacturing and service PMI data Friday.

Expected Ranges

  • AUD/USD: 0.6580 - 0.6700 ▲
  • AUD/EUR: 0.6120 - 0.6220 ▲
  • GBP/AUD: 1.8980 - 19220 ▼
  • AUD/NZD: 1.0775 - 1.0875 ▲
  • 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.