This week’s wave of risk on flow has supported the Australian Dollar (AUD) well moving up to 0.6450 levels against the US Dollar (USD) a 6-week high. US data of late and a dovish Fed have markets pricing in the latest cash rate at 5.5% as a peak. The Fed left rates unchanged overnight, Reserve Bank chairman Powell speaking about how much inflation was slowing rather than highlighting how poor recent growth and data has been. Mixed messages by Powell speaking of rate cuts amid prospects of the economy running hot again and the need to hike more. US stocks and commodity markets rallied over 1.5% post the news. US NFP published tonight and should reflect a slowing jobs market and may rally the AUD further. Looking ahead we have next week’s RBA cash rate announcement with the central bank predicted to raise from 4.10%, I would be surprised if we didn’t see numbers north of 0.6480 over the coming days.
The current interbank midrate is: AUDUSD 0.6428
The interbank range this week has been: AUDUSD 0.6313- 0.6455