Aussie dollar continues to trade above US$0.67

Daily Currency Update

The Australian dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.6730 at time of writing. The Aussie dollar held its ground against the Greenback on Friday, which weakened following soft US Nonfarm Payrolls (NFP) figures but stands at its highest level since early January.  Last week the Minutes of the Reserve Bank of Australia’s (RBA) June monetary policy meeting showed Tuesday that the “board judged the case for holding rates steady stronger than for hiking.” Members observed that inflation was still above central bank targets in most economies, and services price inflation had generally been stronger than expected since the start of the year. However, in some economies where output gaps were clearly negative, such as Canada and Sweden, services price inflation had continued to moderate. The labour market was still assessed as tight relative to full employment, though conditions had continued to ease gradually in recent months as expected. The case to hold the cash rate steady at this meeting would also be strengthened to the extent that risks to the outlook for the labour market were seen to be to the downside. Looking ahead this week and on Tuesday we will see both the Westpac Consumer Sentiment and the NAB Business Confidence. On Thursday the Melbourne Institute will release the Consumer Inflation Expectations. Expectations of future inflation can manifest into real inflation, primarily because workers tend to push for higher wages when they believe prices will rise.