AUD/USD trades below 70 US cents

OzForex Research OzForex Foreign Exchange

Daily currency update

The Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar collapsed after US economic data on Friday showed that the labor market remained tight, and it would keep the US Federal Reserve under pressure to bring down inflation to the 2% target. At the time of writing, the AUD/USD exchanges hands at around 0.69 US cents. Last week Business confidence fell considerably in Q4 as concerns about global and domestic economic growth mounted. Still, business conditions remained strong, albeit easing from the highs seen in Q3. The easing in conditions was evident across industries and states, but all remained in positive territory. Looking ahead this week and today the Australian Bureau of Statistics will release monthly retail sales figures which is the primary gauge of consumer spending, which accounts for the majority of overall economic activity. On Tuesday all eyes will be on the Reserve Bank of Australia (RBA) official cash rate announcement which is expected to lift the interest rates by another 0.25% from 3.10% to 3.35%. Although it’s not a given. The Reserve Bank could use its first meeting of the year to deliver a super-sized 0.4 percentage point lift in official interest rates as the RBA’s aggressive tightening of monetary policy is now starting to bite across the economy.

Key movers

On Friday in the United States US jobs data surprised investors as further Federal reserve action is now expected. The US Department of Labor (DoL) revealed January data that surprised investors, with Nonfarm Payrolls smashing expectations after the economy created 517K jobs in the month, exceeding estimates for the creation of just 185K jobs. Consequently, the Unemployment Rate fell to 3.4% from 3.5%, while December’s figures were revised upward. Average Hourly Earnings, sought by the US Federal Reserve as a measure of wages inflation, linked to last week’s Employment Cost Index (ECI), came in at 0.3% MoM, in line with forecasts but lower than December’s report. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike. Last week the Federal Open Market Committee (FOMC) announced a 25 basis point increase in its benchmark rate range to 4.50 – 4.75 percent. The increase was a further step down in pace from the 50 bp increase in December and the 75 bp hike in November. On Wall Street, the Nasdaq 100 and Dow Jones fell -1.59% and -0.38% Friday. Still, the former ended the period in the green. Across the Atlantic Ocean, the FTSE 100 and DAX 40 rose 1.76% and 1.91%, respectively. Things were more pessimistic in Asia, with the Hang Seng Index sinking by 4.53%.

Expected ranges

AUD/USD: 0.6800 – 0.6900 ▼
AUD/EUR: 0.6300 – 0.6500 ▼
GBP/AUD: 1.7300 – 1.7500 ▲
AUD/NZD: 1.0750 – 1.0650 ▲
AUD/CAD: 0.9100 – 0.9300 ▲

Author

OzForex Research

OzForex Foreign Exchange

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.