AUD – Australian dollar
The AUS/USD pair continues its downward trajectory, hovering around the US$0.6250 level, as concerns over trade tensions intensify following US President Donald Trump’s announcement of gradual tariffs on Colombia. Market participants are bracing for the Federal Reserve’s upcoming policy decision today, with expectations leaning heavily toward the central bank maintaining its benchmark interest rate unchanged. However, uncertainty lingers regarding the Fed’s longer-term stance, particularly in light of Trump’s persistent calls for immediate rate cuts.
On the Australian front, the Aussie remains under pressure the Reserve Bank of Australia (RBA) may adopt a more dovish approach. Additionally, a modest recovery in the US dollar, fueled by growing risk-off sentiment, is further weighing on the Aussie. The market is eagerly awaiting the release of CPI data for December and the fourth quarter of 2024, which is due to be announced today.
Key Movers
The US Dollar index (DXY) climbed to a two-day high, surpassing the 108.00 threshold, as renewed demand for the Greenback fueled its upward momentum. Market attention is now firmly focused on the upcoming FOMC meeting, which is expected to dominate the week’s economic agenda. Additional data releases, including Wholesale Inventories, advanced Goods Trade Balance, and weekly Mortgage Applications will also be closely monitored for further insights into the US economic landscape. The euro retreated to two-day lows, testing the critical US$1.0400 support level of the back of US strength. Germany’s Consumer Confidence report is set to be released, soon followed by the ECB’s M3 Money Supply data. Meanwhile, the British pound mirrored the downward trend of its risk-sensitive counterparts, sliding to weekly lows near the US$1.2400 mark amid the Greenback’s robust rebound. Market watches await Bank of England Governor Andrew Bailey’s scheduled speech. The Japanese yen failed to hold on to its 3-day winning streak and since experienced a -0.65% loss on the day. Market participants will now focus on the release of the Bank of Japan’s meeting minutes and the Consumer Confidence index, which are expected to offer fresh cues on Japan’s economic outlook.
Expected Ranges
AUD/USD: 0.6235 – 0.6295 ▼
AUD/EUR: 0.5980 – 0.6000 ▼
GBP/AUD: 1.9850 – 1.9920 ▲
AUD/NZD: 1.1030 – 1.1065 ▼
AUD/CAD: 0.8980 – 0.9045 ▼