interbank midrate

The AUD has been soft over the last week, trading consistently below 0.6600. The underlying recessionary economic conditions prevail and this is not likely to change. The markets will closely watch Australian Commodity prices, inflation and PMI data to determine any economic mood change. The biggest influence on the currency is expected to be the FOMS meeting and the impact on the reserve currency. Hawkish Federal reserve commentary is likely to exacerbate the AUD
weakness.

Current Level: 0.6590
Support: 0.6550
Resistance: 0.6700
Last week’s range: 0.6554 – 0.6600

Commodity prices remain key to the economic performance of the Australian economy. A measure of Australian Commodity Prices comes out in the coming week, along with final PMI data. Expectations are not high, so recessionary conditions are expected to remain, with the FOMC meeting this coming week, being the greatest influencer. The AUD has traded around 0.6600 for the last week, but the Fed and their decision is likely to have greater impact on the AUD trading direction.

Current Level: 0.6589
Support: 0.6530
Resistance: 0.6635
Last week’s range: 0.6554 – 0.6619

Are we seeing signs of a long-term base forming in the Australian Dollar (AUD), US Dollar (USD) pair at 0.6530? A January close below this level would be cause for concern and a rethink of where support lies. Certainly, when we look at the yearly open price circa 0.6815 the Aussie has come off a chunk in a short period of time. With the RBA done hiking interest rates, 2024 will be about cuts and the timing of these. We are forecasting 3 plus cuts in 2024. Let’s hope the banks pass on these rate drops to consumers- say are saying mortgage holders shouldn’t get too excited as not all cuts are passed down. The AUD may be pushed around this week by offshore forces based on no data publishing and an Australian Holiday Friday creating thin market conditions.

The current interbank midrate is: AUDUSD 0.6567

The interbank range this week has been: AUDUSD 0.6564- 0.6612

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