Aussie dollar trades back below US$0.66
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6591 at the time of writing. The Greenback held its ground on Friday but seems stuck as markets await drivers to continue placing their bets on the next Federal Reserve (Fed) decisions. The US economy remains on shaky ground, and markets are expecting signs of decelerating inflation, which gives the Fed confidence to start cutting. In the meantime, the bank’s officials remain hawkish. Last week the RBA left its cash rate on hold at 4.35% for a fourth consecutive meeting on Tuesday in a result that was widely expected. Only one economist, Capital Economics, predicted the central bank would lift the cash rate. The RBA statement left its key words basically unchanged, while the bank remained “vigilant to upside risks” to inflation. Prior to last month’s release of higher than expected inflation figures for the March quarter, most economists and investors had been forecasting the RBA to cut rates from as soon as September. Looking ahead to this week and today we will see the release of the NAB Business Confidence. On Tuesday the Australian Treasury will release the Annual Budget. This document outlines the government's budget for the year, including expected spending and income levels, borrowing levels, financial objectives, and planned investments. Finally, on Thursday the Australian Bureau of Statistics will release the latest monthly Unemployment Rate Decision which is expected to see the jobless rate increase from 3.8% to 3.9%.Key Movers
Last week in the United States the number of Americans filing new claims for unemployment benefits rose last week to the highest level in more than eight months, offering more evidence that the labor market was steadily cooling. The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy's health, followed news last week that the economy added the fewest jobs in six months in April, while job openings dropped to a three-year low in March. Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the highest level since the end of last August. The increase was the largest in nearly four months. Economists polled by Reuters had forecast 215,000 claims in the latest week. Claims broke above the 194,000-225,000 range, which had prevailed since the start of the year. Looking ahead this week and on Tuesday we will see the release of the monthly Producer Price Index (PPI). On Tuesday we will see the release of both the Consumer Price Index (CPI) and monthly Retail Sales Figures. Finally, on Thursday we have Unemployment Claims and housing data.On Friday China's consumer prices rose for a third straight month in April, while producer prices extended declines, signalling an improvement in domestic demand, as Beijing navigates challenges in its bid to shore up a shaky economy. The closely watched numbers follow better-than-expected import data for April, suggesting a flurry of policy support measures over the past several months may be helping consumer confidence. Consumer prices edged up 0.3% in April from a year earlier, data from the National Bureau of Statistics showed on Saturday, versus a rise of 0.1% in March and a Reuters poll forecast for an increase of 0.2%. Core inflation, excluding volatile food and fuel prices, grew 0.7% in April, up from 0.6% in March. Overall the consumer price index (CPI) rose 0.1% from the previous month, beating a forecast fall of 0.1% in the poll and reversing a drop of 1% in March.
Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▼
- AUD/EUR: 0.6000 - 0.6200 ▼
- GBP/AUD: 1.8850 - 1.9050 ▲
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.8950 - 0.9150 ▼