The Australian Dollar (AUD) has recovered losses post last week’s CPI slide to 0.6700 picking up bids this week on its way to 0.6760 early this morning. The US Dollar index slipping under 102.0 from 106.0 supported originally by a hawkish Fed – however the run has been unsustainable. Interest rate differentials remain bullish for the greenback with a further hike expected at the 4th May meeting. There are signs that demand for labour is cooling, and inflation is expected to come down to around 3.5% by year end. US Manufacturing prints tonight amid several Fed members speaking. Looking ahead we have Aussie CPI Wednesday, next week’s economic highlight. We may see a retest of 0.6780 prior to the weekly close as the AUD is squeezed.
The current interbank midrate is: AUDUSD 0.6739
The interbank range this week has been: AUDUSD 0.6680- 0.6770