The Australian Dollar (AUD) continues to extend gains against the US Dollar (USD) as it approaches the key 0.7000 figure this morning. Coming off 0.6700 areas mid-July represents good buying and should be considered as the general tone of the pair is still to the downside. The Federal Reserve raised their key interest rate 75 points to 2.50% yesterday in a unanimous decision by the 12 Fed members as the Fed stay aggressive on policy to bring down rising 40-year high inflation. This is the highest single rise to the cash rate since 1994. The Fed saying there are obvious signs of the economy slowing since last month’s policy meeting. US “prelim” CPI came in at -0.9% overnight signalling the economy is heading for a recession, or are they? Recession aficionados are rejecting the rule of thumb that two negative growth quarters officially spells an economic recession saying this theory in today’s times has no actual merit. Employment continues to rise, and industrial production is solid while retail sales as a measure of consumption has been tainted by high inflation skewing “real” growth. Next week we have RBA cash rate and US Non-Farm Payroll releasing.
The current interbank midrate is: AUDUSD 0.6999
The interbank range this week has been: AUDUSD 0.6875- 0.7012