interbank midrate

The Australian Dollar (AUD) recovered off 0.6460 midweek against the US Dollar (USD) making back early week losses on its way to 0.6570 this morning. The Fed held interest rates on hold at 5.5% as widely expected extending a wait and see model, Powell saying inflation setbacks could keep policy in place “higher for longer” and rate increases were certainly not required. Data dependant we believe a shift to policy and potential rate cuts could kick off earlier towards year end. Markets await US Non-Farm Payroll numbers late tonight with unemployment predicted to come in at 3.8% and jobs numbers around 238k, we are expecting the cross to go lower if the report is strong.

The current interbank midrate is: AUDUSD 0.6571

The interbank range this week has been: AUDUSD 0.6464- 0.6586

The Australian Dollar (AUD) has been unable to hold early week levels around 0.6570 against the US Dollar (USD) dropping in overnight sessions to reach  0.6475. Risk sentiment waned as equity markets were mostly off around 1.5% as investors became nervous around tomorrow’s Fed agenda. Also of note was a weaker US consumer confidence number, the index falling to 97.0 from 103.1 the lowest level since July 2022. As we look ahead to tomorrow’s Fed meeting investors are becoming nervous about inflation expectations and the “higher for longer” mantra. Earlier we saw a drop in Australian Retail Sales falling 0.4% in March, weaker than market predictions, attracting sellers of AUD. Non-farm Payroll prints Friday to end a busy week of economic releases. The level in focus on the downside is 0.6450- a break past here and we could be eyeing 0.6400.

Current Level: 0.6475
Support: 0.6400
Resistance: 0.6640
Last week’s range: 0.6406- 0.6552

Signs of a potential base forming in the Australian Dollar (AUD), US Dollar (USD) cross look likely with price bouncing off 0.6380 several times over the past year. The reversal off 0.6365 late last week extended into Tuesday with the pair reaching 0.6450, a break past 0.6480 would be reason for a rethink of the overall downside bias in play. Big picture geopolitical uneasiness remains unsettled overall with tensions still reasonably high in Iran/Israel. Still however a mild recovery in equity markets overnight was welcomed by buyers of the big dollar. On the calendar this week is Australian first quarter CPI with predictions of a rise from 0.6% to 0.8% with the y/y number to come off 4.1% to 3.4%. A pickup in the iron ore price from early April’s 98.00 to 108.25 this morning is having a modest impact on the AUD and could continue if Chinese Industrial orders remain buoyant.

Current Level: 0.6460
Support: 0.6400
Resistance: 0.6630
Last week’s range: 0.6360- 0.6492

The Australian Dollar (AUD) managed to recover some of the early week losses against the US Dollar (USD) in a strong bear market to push off the low at 0.6385 to reach 0.6455 Thursday. Aussie dollar shorts took profit as Australian job numbers rose. Unemployment rose 0.1% to 3.8% in March while the employed fell by 6,600. The Australian labour market is expected to stay buoyant for some time with expectations of unemployment to be at 4.3% by year end. Spending will likely be squeezed with high interest rates. Interest rates not predicted to drop until later in 2024. With the cross trading below key support at 0.6450 we expect further bearish momentum.

The current interbank midrate is: AUDUSD 0.6411

The interbank range this week has been: AUDUSD 0.6387- 0.6492

The Australian Dollar (AUD) has gone 2 cents lower since mid-last week against the US Dollar (USD) falling hard after the Iran air strikes on Israel over the weekend extended declines. This is retaliation of the attack on the Syrian consulate. Overnight US Retail Sales beat expectations fuelling a greenback buy spree amid reduced geopolitical tensions. March figures are up 0.7% form 0.3%, the news also pushing up the 10-year treasury yield to 4.619 the highest level since November last year. Australian Jobs numbers release Thursday with the unemployment figure expected to print higher to 3.9% from 3.7% in February. This wont please the RBA as jobs data has a direct impact on inflation forecasting. With the AUD/USD down at 0.6440 as I write we may see a reconciliation of sorts as short sellers take profit.

Current Level: 0.6443
Support: 0.6430
Resistance: 0.6530
Last week’s range: 0.6454- 0.6643

The Australian Dollar (AUD) edged higher to a 4-week high of 0.6644 against the US Dollar (USD) in early week moves as risk sentiment improved. As the US Federal Reserve delivered their inflation report prices in the cross plummeted 120 points to 0.6500 levels with markets not happy about the uptick in inflation from 3.4% y/y at 3.5%. This is the third straight month CPI has increased above expectations. The Fed now will dial back interest rate cuts predicted earlier this year most likely from June to September. Inflation cooled at the end of 2023, but the Fed now seems less confident they will see levels around 2.0% targets in 2024 making for a “higher for longer” theme.

The current interbank midrate is: AUDUSD 0.6540

The interbank range this week has been: AUDUSD 0.6497- 0.6643