The Australian Dollar (AUD) has given back last week’s gains against the US Dollar (USD) reversing out from fresh highs around 0.6850 to 0.6770 this morning. Risk conditions have not been ideal with equity markets all coming off in December. US bond yields have also tracked lower with US third quarter labour costs rising 5.3% from a year ago with productivity declining 1.3% y/y. The RBA hiked rates just 25 points to 3.1% Tuesday as predicted with Governor Lowe suggesting further inflationary pressures are in store over the coming months. Third quarter growth came in at 0.6% down from expectations of 0.7% highlighting scary prospects that inflation could track much higher and push the cash rate above the 3.85% top expected. Recent momentum could carry the cross to 0.7000 by Christmas.
Current Level: 0.6727
Last Weeks Range: 0.6638-0.6844