Home Daily Commentaries AUD tracks sideways as markets look to key US inflation updates

AUD tracks sideways as markets look to key US inflation updates

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.

| Tuesday 13 August, 2024

Daily Currency Update

The Australian dollar hardly moved through trade on Monday, tracking a very narrow range. With little headline news flow or major data on hand to give markets new direction, investors appeared content in squaring positions ahead of key US inflation data. The AUD bounced between US$0.6565 and US$0.6585, closing 0.1% higher on the day. After last week's flash crash wherein the AUD tumbled to intraday lows below US$0.6350, the AUD has worked hard to recoup much of the downturn, yet continues to struggle on moves approaching US$0.66.

Our attentions turn now to US PPI data ahead of Wednesday’s all-important CPI print and Domestic employment data Thursday. With markets now pricing in 100 basis points of cuts across the next three Fed meetings, another softening in inflation pressures could help catapult the AUD higher. That said, there remains a heightened level of uncertainty surrounding the JPY carry trade. Further unwinding will act as a handbrake, preventing extended AUD gains in the near-term.

Key Movers

With little headline data or news flow to give markets new direction, price action was well contained through trade on Monday, with most majors tracking within a 0.2% range. The DXY index was little changed while the euro and GBP were mostly flat. The yen was the day's big mover, underperforming and allowing the USD to move back above 147, marking session highs briefly above 148, before settling nearer 147.2. Price action has settled since touching 141.7 last Monday, yet the dollar is significantly lower than it was in July, well off levels above 160.

Our attentions turn now to US PPI data tonight ahead of Wednesday’s all important CPI print. With markets pricing in 100 basis points of cuts over the next three Fed meetings, sustained easing of price pressure could add downward pressure on the USD and help revive risk appetite.

Expected Ranges

  • AUD/USD: 0.6480 - 0.6620 ▲
  • AUD/EUR: 0.5580 - 0.6080 ▲
  • GBP/AUD: 1.9200 - 1.9500 ▼
  • AUD/NZD: 1.0900 - 1.1000 ▼
  • AUD/CAD: 0.9000 - 0.9100 ▲

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.