interbank midrate

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

The RBA has been less than certain in their policy narrative over recent times. The inflation numbers have been steadily falling, in line with market expectations, but the RBA Governor has been very nervous in her commitment to future rate moves. Markets are looking for a clear direction and continued declines in the CPI, will give some certainty, but any
aberration will draw an immediate hawkish reaction. The AUD has fallen from early 2024 highs of 0.6850, to trading below 0.6500, also a victim of the resurgent reserve currency. Keep a close eye on the Australian GDP growth number, out Wednesday, for a glimpse at the state of the economy.

Current Level: 0.6500
Support: 0.6450
Resistance: 0.6620
Last week’s range: 0.6470- 0.6530

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.

The current interbank midrate is: AUDUSD .6508

The interbank range this week has been: AUDUSD .6484 – .6565

The Australian Dollar (AUD), US Dollar (USD) slipped below the key moving average level at 0.6550 overnight falling to 0.6530 extending late last week’s drop. Aussie manufacturing numbers last week could still be impacting the currency while “risk” sentiment has certainly turned lower. Of note the cross has rebounded off the Fib 50% retracement level at 0.6580 also suggesting we could see more downside towards 0.6500. Fed member Waller has said: not lowering rates in the coming months and waiting too long- the Fed risks pushing the US economy into a recession.

Current Level: 0.6539
Support: 0.6520
Resistance: 0.6580
Last week’s range: 0.6520- 0.6594

US Manufacturing figures overnight came in soft under 50 while Services PMI numbers improved making the first expansion in the industry in 5 months. This boosted the US Dollar (USD) off 0.6580 levels to 0.6550 this morning. Apart from this slump the Australian Dollar (AUD) has had a decent week after kicking around 0.6540. A soft landing of the US economy is being talked up by Jefferson, vice chair of the Fed; however, rate cuts will depend on upcoming economic progress and the pace of inflation. Next week’s Australian CPI y/y is our key release with forecast of a drop into the 2’s.

The current interbank midrate is: AUDUSD 0.6556

The interbank range this week has been: AUDUSD 0.6520- 0.6594