interbank midrate

The Australian Dollar (AUD) has given back last week’s gains against the US Dollar (USD) falling hard to 0.6360 this morning. Pockets of recoveries midweek saw the pair hold around 0.6400 for a short time but with markets diverting back to “risk off” flow has been unwound into the greenback. The RBA hiked their interest rate to 4.35% as widely expected to a 12 year high. New governor Bullock said she was ready to hike again if required. Inflation is still too high and has proven more persistent than it was a few months back. The release and post sell off in the Aussie left punters scratching heads as usually hikes attract investors buying the associated currency. Attention now will divert to the Australian wages data publishing next week- a sharp rise in numbers may point to another rate hike in December. We expect the current bear trend to continue into the weekly close.

The current interbank midrate is: AUDUSD 0.6365

The interbank range this week has been: AUDUSD 0.6361- 0.6522

0.6480 came and went as we predicted – the Australian Dollar (AUD) reaching a 12-week high last week trading to 0.6520 against the US Dollar (USD) rising 2.45% as risk markets enjoyed a selloff in the greenback. Not only did risk trading support upside in the Aussie but a mix of better-than-expected economic data including PMI reads, Retail Sales and a hawkish RBA sent the AUD on a massive bull run. Today’s Reserve Bank of Australia (RBA) cash rate announcement is our weekly standout with a hike widely predicted from 4.10% to 4.35%, we expect a push up in the Aussie.

Current Level: 0.6488
Support: 0.6450
Resistance: 0.6520
Last week’s range: 0.6312 – 0.6513

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

Extending moves off last week’s yearly low at 0.6270 the Australian Dollar (AUD) continues to claw back losses against the US Dollar (USD) to 0.6380 this morning. We would need to see a break above 0.6390 before a new bull trend is confirmed. Risk flow has benefited the Aussie and other risk currencies and products with things improving in Gaza/Israel. The Israel ‘ground offensive” has got underway, Israeli forces now deep into Gaza, the fear being the involvement of USA and Iran, which hasn’t happened yet with fighting limited to Gaza. Markets are viewing this as good news. Earlier Australian Retail Sales printed much better than the 0.3% forecast for September coming in at 0.9% bringing back questions if the RBA will hike interest rates on 7 Nov. The Fed meet Thursday and should hold rates at 5.50%

Current Level: 0.6369
Support: 0.6300
Resistance: 0.6550
Last week’s range: 0.6270 – 0.6399