AUD/USD unable to hold on to 67 US cents
|Daily currency update
The Australian dollar is slightly stronger this morning when valued against the Greenback. The AUD/USD was rejected again from above 0.6750 and retreated to as low as 0.6690, before bouncing back above 0.6700 after Wall Street’s opening. Data from the US showed a larger-than-expected decline in Jobless Claims, helping the US Dollar gain some ground. Still, the greenback remains under pressure after the FOMC meeting. The Federal Reserve raised its key interest rate by 25 basis points but did not commit to further rate hikes. The Aussie dollar was among the worst performers overnight with AUD/NZD reaching fresh three-day lows under 1.0700. The recovery in AUD/USD is being driven by higher equity prices and a weaker US Dollar, as the Aussie remains below 67 US cents. Looking ahead today we will see the release of the Purchasing Managers’ Index (PMI) a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. A leading indicator of economic health as we see businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.
Key movers
Overnight The Bank of England (BOE) has shrugged off the anxiety from this week’s bruising bout of banking ructions, opting for another push to douse Britain’s resurgent inflation rate. Following the US Federal Reserve’s lead from a day earlier, the BoE jacked up its benchmark interest rate by 0.25 percentage points to 4.25 per cent, an 11th consecutive increase. The BoE noted that ‘CPI inflation increased unexpectedly in the latest release, but it remains likely to fall sharply over the rest of the year’. BoE Governor Bailey suggested that there were some signs February’s inflation reading was a ‘one off’. Expectations are growing that the Fed, the BoE and ECB will start to slow their tightening of monetary policy, particularly as falling energy prices take some of the heat out of inflation. The markets are pricing in a peak in the benchmark rate of 3.5 per cent in the eurozone and 5 per cent in the US and 4.5 per cent in Britain.
Expected ranges
- AUD/USD: 0.6600 – 0.6800 ▼
- AUD/EUR: 0.6100 – 0.6300 ▼
- GBP/AUD: 1.8300 – 1.8500 ▲
- AUD/NZD: 1.0600 – 1.0800 ▼
- AUD/CAD: 0.9050 – 0.9250 ▲
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.