interbank midrate

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

The Australian Dollar (AUD) rose from 0.6480 late Monday reversing 10 days of losses as the currency travelled to 0.6620 against the US Dollar (USD). The Aussie has been boosted from precious metal prices particularly Copper, along with rises in equities. However, in NY overnight trading we have seen the AUD fall back to 0.6580 into Friday. Meanwhile US Manufacturing jumped in March mildly supporting the big dollar which has triggered questions over a June Fed rate cut. Tonight, we have US Non-Farm Payroll and the unemployment rate which should cause volatility.

The current interbank midrate is: AUDUSD 0.6582

The interbank range this week has been: AUDUSD 0.6479- 0.6618

The Australian Dollar (AUD) consolidated around 0.6520 levels at the end of the week after moving back from 0.6630 after stronger than expected job numbers. The US Dollar (USD) remains in change fundamentally with risk sentiment factored in. Monday we saw 0.6555 before the currency slipped below the 50-day moving average to 0.6530 as it looks to retest 0.6500. Today’s CPI y/y for February should show a rise in inflation which will no doubt be a concern for the RBA who are ready to start cutting rates. A break below 0.6450 could reflect a further retest of the low at 0.6350.

The current interbank midrate is: AUDUSD 0.6533

The interbank range this week has been: AUDUSD 0.6504- 0.6558

After falling to 0.6500 levels early in the week against the US Dollar (USD) the Australian Dollar (AUD) has put in a decent performance to bounce back to 0.6630 late Thursday. The currency running up off the back of big Dollar weakness post the Fed rate announcement. The Fed left rates unchanged at 5.50% with Fed chair Powell saying stronger growth and firmer than expected inflation has changed the expectation of timing with kicking off rate cuts which is predicted to start around midyear. The Aussie wasn’t able to hold gains around 0.6630 falling to 0.6560 into Friday on stronger than expected Australian Jobs data with unemployment dropping from 4.1% to 3.7% in February.

The current interbank midrate is: AUDUSD 0.6574

The interbank range this week has been: AUDUSD 0.6503- 0.6633

The RBA is meeting and will announce their latest rate decision today, the 19 th of March. The Central Bank is expected to leave rates unchanged, but remain vigilant on the inflation front. If the Bank retains their ‘hawkish’ stance on monetary policy, the AUD is likely to remain fairly stable, but any signs of uncertainty would spell disaster. The Fed meeting this week, is likely to bring real directional certainty. A bearish Fed will support the AUD, but any further confirmation of resurgent inflation in the US, will spark the ‘higher for longer’ narrative from the Fed. This could accelerate the rebounding reserve and magnify recent weaknesses in the commodity currency.

Current Level: 0.6525
Support: 0.6450
Resistance: 0.6800
Last week’s range: 0.6557- 0.6617