AUD/USD: The pair appreciates by almost 5% since April – DBS
05.07.2024, 11:17

AUD/USD: The pair appreciates by almost 5% since April – DBS

AUD/USD bottomed below 0.64 on April 19 and rose above 0.67 on Thursday. Australian Dollar (AUD) bucked the depreciation in the Japanese Yen (JPY) and the Chinese Yuan (CNY), DBS Senior FX Strategist Philip Wee notes.

AUD trades above 0.67 on Friday

“AUD/USD bottomed below 0.64 on April 19 and rose above 0.67 on Thursday. The rally was impressive, considering how AUD bucked the depreciation in JPY and CNY, the currencies of its two largest trading partners. Since April 19, the currency pair has appreciated by 4.8% to 0.6726.” 

“Between April and May, Australia’s CPI inflation hit a six-month high of 4% YoY, while the US’s PCE inflation fell to a three-month low of 2.6% YoY. The unemployment rate declined to 4% from 4.1% in Australia but increased to 4% from 3.9% in the US. Australia’s retail sales growth accelerated to 0.6% MoM from 0.1%, but US retail sales ex-autos contracted by the same 0.1% MoM pace for a second month.”

“Interest rate futures are not ruling out another hike by the Reserve Bank of Australia this year. Although the RBA kept the cash rate target unchanged at 4.35% at its meeting on June 18, the RBA minutes showed the committee considering a hike on upside inflation risks. Conversely, the futures market has increased the odds of a Fed cut in September to 70% from 50% last Friday.”

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