The Australian Dollar (AUD) pushed higher over the week against the US Dollar (USD) as risk markets improved post the interest rate cut by the Bank of China. In efforts to stimulate the economy the PBOC announced a surprise cut from 2.75% to 2.50%. The Aussie rallied to 0.6980 where it currently sits. Fed officials said yesterday on TV that it was uncertain how much the Fed will raise rates at next month’s Fed meeting. Although high inflation calls for tighter policy, they are not ready to commit to the size of the next hike, this could be 75 or 50 points. Opinions by members are suggesting inflation may ease over the coming months which could change things dramatically. Further rises in the cross may be limited as the AUD looks a tad overbought.
The current interbank midrate is: AUDUSD 0.6972
The interbank range this week has been: AUDUSD 0.6854- 0.6989