interbank midrate

We have seen a slew of economic releases publish over the past couple of days moving the Australian Dollar eventually higher to 0.6830 into Friday sessions against the US Dollar (USD). The Federal Reserve cut rates yesterday morning by 50 points to 5.00% surprising markets based 25-point forecasts. The AUD shot lower weirdly to post 0.6740 before Australian jobs data later in the day pushed the AUD back towards 0.6830 where it should have been earlier. Unemployment numbers were better than predictions and the unemployment rate remains at 4.2%. As wage growth has remained buoyant this has led to inflation struggling to return to the RBA’s target, this being said the RBA will hold their cash rate at 4.35% next Tuesday. We expect further upside moves to continue to push into fresh yearly highs past 0.6830.

The current interbank midrate is: AUDUSD 0.6810

The interbank range this week has been: AUDUSD 0.6688- 0.6838

The Australian Dollar (AUD) extended last week run from 0.6620 levels against the US Dollar (USD) climbing to 0.6750 as we head into Tuesday sessions. The pair is creeping towards the yearly high around 0.6800. 0.6780 is the next level of resistance, we may see some reconciliation around here if it retests over the week. We have a bunch of economic data releasing with the main attraction the Federal Reserve Cash rate and policy statement. The Fed are expected to cut their interest rate 25 points from 5.50% Thursday morning with a small chance of a 50-point cut on the table. Aussie jobs data prints around midday Thursday which will be closely watched with comments being made lately of a possible recession on the cards.

Current Level: 0.6751
Resistance: 0.6830
Support: 0.6650
Last Weeks Range: 0.6621- 0.6732

The Australian Dollar (AUD) has been unable to hold the key level around 0.6750 against the US Dollar (USD) Friday dropping to close out the week at 0.6675. Risk took on water post the release of the US Non-farm Payroll release Friday with the jobs report coming in poor dragging risk currencies lower. Unemployment ticked lower from 4.3% to 4.2% with markets digesting this week’s inflation report and next week’s Federal Reserve monetary policy and whether the central bank will only cut 25 points instead of the earlier forecasted 50 points. Odds now of quarter percent cut are now around 75% pending how inflation prints Thursday. Year on year numbers is predicted to come in at 2.6% down from 2.9%, anything north of 2.6% will be a game changer. Action above 0.6700 this week will be challenging.

Current Level: 0.6652
Resistance: 0.6700
Support: 0.6620
Last Weeks Range: 0.6684- 0.6794

The AUD has struggled to perform over the last week, with weaker than expected GDP growth confirming the worst economic conditions since the recession of the 1990’s. The RBA warns inflation remains stubbornly high and interest rates will ‘remain higher for longer’. This should offer support to the currency but weakening economic conditions undermine the currency. The softer economy in the US and Europe, also impact commodity prices negatively, through lower demand, adding to the conundrum.

The current interbank midrate is: AUDUSD .6740

The interbank range this week has been: AUDUSD .6680 – .6790

The AUD has slipped back below 0.6800, as a resurgent reserve takes the shine off the currency recovery. Commodity prices have been slowly improving and the stubborn position of the RBA has also supported a rise in the AUD. This week will see the release of the Australian GDP growth number, on Wednesday the 4th of September. This is expected to be around 1%, so positive, but weak. The weaker economy and stubborn inflation catches the RBA ‘between a rock and a hard place’.

Current Level: 0.6785
Resistance: 0.6830
Support: 0.6600
Last Weeks Range: 0.6751- 0.6821