interbank midrate

Commodity demand has been directly impacted by the recessionary economic conditions in Europe, which has a down-chain economic impact on China, and thus the Australian commodity markets. Inflationary pressures in the Australian economy remain clear and present, while the labour market remains relatively firm. The resurgent reserve currency has forced the AUD back from 2023 highs of 0.6850, back down towards 0.6500. There may be some downside left, if Geo-Political conditions in the Middle East extend and supply chain problems remain.

Current Level: 0.6550
Support: 0.6540
Resistance: 0.6660
Last week’s range: 0.6550 – 0.6700

It’s been a slow start to 2024 as always with thin liquidity and a US holiday thrown in. The Australian Dollar (AUD) started 2024 around 0.6800 and has eased back to 0.6650 this morning. Speak of rate cuts could continue to weigh on the AUD with experts forecasting the Reserve Bank of Australia may cut interest rates by August this year. Last week’s inflation figures dropped to 4.3% in November down from 4.9% in October showing an improvement in the right direction. No change from 4.35% is predicted in their February meeting but if inflation continues to trend lower we may see the RBA cut earlier than August. Poor recent Chinese data is also not doing the AUD any favours however we believe the cross should stay above 0.6640 in this little move lower.

Current Level: 0.6660
Support: 0.6600
Resistance: 0.6850
Last week’s range: 0.6645 – 0.6733

The Australian Dollar (AUD) reached a fresh new high overnight against the US Dollar (USD) of 0.6795 as risk sentiment improved Thursday. Fed officials continue to push back on earlier aggressive forecasting of rate cuts while US data came in positive. Apart from a blip in equity markets midweek when we saw the cross-dip half a cent to 0.6720 the Aussie remained in charge as commodity prices recovered. As we head into 2024 markets will be thin, as usual at this time of year we can expect swings. Good time to put in orders.

The current interbank midrate is: AUDUSD 0.6799

The interbank range this week has been: AUDUSD 0.6689- 0.6799

The Federal Reserve kept rates unchanged late last week at 5.50% but pivoted on policy reflecting a dovish stance. The Fed’s ability to guide the economy to a soft landing is being commended with the timing of rate cuts suggested for 2024 along with key risk management. The chance of further rate hikes are now slim with several rate cuts being priced in from mid-2024. The AUD/USD bounced from 0.6600 levels to 0.6670 around the release. Unemployment rose in November to 3.9% the highest level since May 2022 vs forecast of 3.8%. This sent the Aussie higher again underpinning the recent RBA’s concern of persistent domestic demand. The economy added 61,500 jobs – more than the 11,500 expected. The Aussie has held up well since as equities posted gains, into morning trade around the 0.6700 level just off a 20-week high.

The current interbank midrate is: AUDUSD 0.6702

The interbank range this week has been: AUDUSD 0.6689- 0.6734

A solid US jobs report Friday moved the Australian Dollar (AUD) lower against the US Dollar (USD) closing the week around the 0.6570 zone. Non-Farm Payroll showed further jobs were added to the economy in November beating expectations of 184k to 199k, some suggesting the US economy could be setting up for a soft economic landing. Unemployment also came in better than expected at 3.7% after 3.9% was expected pushing investors to buy the greenback. The Fed cash rate will publish Wednesday and should remain at 5.5% but not before key US CPI y/y. Whatever happens will set the tone for the following couple of months for AUD/USD direction.

The current interbank midrate is: AUDUSD 0.6566

The interbank range this week has been: AUDUSD 0.6549- 0.6582