interbank midrate

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

The Australian Dollar (AUD) has traded around 0.6600 levels for most of the week against the US Dollar (USD). Last night’s US Retail Sales came in soft, creating a “risk off” market tone with equity markets slipping lower, the release sending the Aussie lower to 0.6570 into Friday morning. Earlier US CPI y/y came in above expectations at 3.2% vs 3.10% creating the probability that rate cuts will be made later than expected. Next week’s RBA rate statement meeting will confirm “a remain” at 4.35% but most likely signal they will keep rates “higher for longer” possibly well into 2025.

The current interbank midrate is: AUDUSD 0.6580

The interbank range this week has been: AUDUSD 0.6568- 0.6638

US Non-Farm Payroll Friday boosted the Australian Dollar to fresh highs of 0.6660 against a weakened US Dollar (USD). In fairness the AUD came from a low of 0.6480 much before the release. China imports data and a stronger equity market also contributed to the strong move higher. Notably the cross has rejected 0.6660 on the topside which sits plumb on the 50% fib retracement of the recent low of 0.6440 and the high of 0.6870 at the start of the year. A slew of US data releases this week including Retail Sales and CPI y/y Wednesday. We think the AUD may drop away towards 0.6540 areas.

Current Level: 0.6610
Support: 0.6500
Resistance: 0.6670
Last week’s range: 0.6476- 0.6666

The AUD has been faring badly against the USD, battered by the ‘hawkish’ approach to monetary policy by the Fed and the mixed messages emanating from the RBA Governor. Australian inflation has been falling steadily and the latest reading of 3.4% was steady, despite projections of a spike back upwards. The RBA Governor have been all over the shop in recent times, but it will be the grim determination of a ‘hawkish’ Federal Reserve that controls the AUD.

Current Level: 0.6616
Support: 0.6515
Resistance: 0.6650
Last week’s range: 0.6535- 0.6610