The Australian Dollar (AUD) continued its winning streak on Monday that began on April 22, trading around the three-week high of 0.6560. The AUD’s upward momentum is fueled by increasing hawkish sentiment surrounding the Reserve Bank of Australia (RBA), spurred by last week’s CPI inflation data surpassing expectations.
The Australian Financial Review reported that Warren Hogan, chief economic adviser at Judo Bank, anticipated that the RBA could implement three cash rate hikes throughout 2024, ultimately reaching 5.1%, with the initial increase likely occurring in August. Investors are likely awaiting the March Retail Sales data, scheduled for release on Tuesday, as it provides insight into Australia’s consumer spending habits, which significantly impact inflation and GDP trends.
The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, retraces its recent gains, possibly reflecting a shift toward risk-on sentiment in the market. However, market analysts anticipate that the US Federal Reserve (Fed) will maintain the current interest rate range of 5.25%–5.5% in its upcoming announcement on Wednesday, likely due to concerns over elevated inflation levels. According to the CME FedWatch Tool, the likelihood of the Federal Reserve’s (Fed) interest rates remaining unchanged in the June meeting has risen to 87.7%, up from last week’s 81.7%.
On Friday, the annual US Core Personal Consumption Expenditures (PCE) Price Index data for March showed an uptick, adding weight to the notion that the Fed may delay any potential rate cuts until September, as indicated by market speculation.
The Australian Dollar trades around 0.6560 on Monday. The pair has extended its advance within a symmetrical triangle formation, with the 14-day Relative Strength Index (RSI) positioned above the 50-level, affirming a bullish stance.
In terms of potential upward targets, the AUD/USD pair may set its sights on the psychological barrier at 0.6600 and subsequently aim for the upper boundary of the triangle, situated around 0.6639.
On the downside, immediate support is anticipated around the psychological threshold of 0.6500. Should this level be breached, it could pave the way for further downside momentum, with the subsequent notable support zone lying around 0.6443, followed by additional support levels at April’s low of 0.6362.
The table below shows the percentage change of the Australian Dollar (AUD) against listed major currencies today. The Australian Dollar was the strongest against the US Dollar.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | -0.21% | -0.25% | -0.15% | -0.63% | -1.33% | -0.55% | -0.32% | |
EUR | 0.21% | -0.05% | 0.05% | -0.42% | -1.11% | -0.34% | -0.11% | |
GBP | 0.26% | 0.05% | 0.11% | -0.38% | -0.94% | -0.29% | -0.06% | |
CAD | 0.15% | -0.06% | -0.11% | -0.48% | -1.05% | -0.41% | -0.18% | |
AUD | 0.63% | 0.42% | 0.36% | 0.48% | -0.68% | 0.08% | 0.31% | |
JPY | 1.26% | 1.02% | 0.98% | 1.11% | 0.61% | 0.68% | 0.93% | |
NZD | 0.56% | 0.35% | 0.29% | 0.40% | -0.07% | -0.76% | 0.24% | |
CHF | 0.38% | 0.15% | 0.09% | 0.21% | -0.26% | -0.95% | -0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).