The Australian Dollar has retreated over the week to the 0.6500 level against the US Dollar (USD) from the weekly open at 0.6650. Easing metal prices and a struggling RMB have contributed to an underperforming Aussie, the pair now sitting at the lowest level since November 2022. Second estimate US GDP for the first quarter 2023 came in at 1.3% revised up from the first estimate, the slowdown attributed to the Fed’s tightening policy. Despite the threat of recession for the economy we expect the Fed to hike just one more time next month with markets pricing in chances at 70% for a hike at the June meeting. US Debt ceiling negotiations are still ongoing to try and raise the ceiling on the 31.4Tn to avoid a disastrous default as early as 1 June. We may see further downside momentum over the coming days.
The current interbank midrate is: AUDUSD 0.6498
The interbank range this week has been: AUDUSD 0.6495- 0.6667