The Australian Dollar (AUD) tracked lower over the week clocking 0.6440 against the US Dollar (USD) as it continued its lower highs followed by lower lows theme. A June rate cut is not that likely now after the US CPI came in hotter than expected at 3.1% y/y for December. This is down from November’s 3.4% – forecast was 2.9%. All those punters expecting a rate cut around mid-year may be disappointed; in fact these numbers could get the Fed excited about a hike further. Aussie job numbers came in softer than expected (unemployment 4.1% from 4.0%) with RBA’s Bullock saying inflation remains well anchored. Core Retail Sales printed poorly in the US and the Aussie came steaming back off lows overnight to trade around 0.6520 after equity markets recovered.
The current interbank midrate is: AUDUSD 0.6525
The interbank range this week has been: AUDUSD 0.6441- 0.6542