The latest Send Payments International Currency Market Update provides an in-depth exploration of the movements seen in major currencies, including the USD, GBP, CNY, NZD, and JPY. It examines the key events that have significantly impacted the values of each of these currencies. Additionally, the report highlights what to watch in the media and financial sectors throughout this week, ensuring that readers stay informed about potential market shifts and developments.

Key Trends

– Market Conditions and What to look out for this Week 🗓️

GBP/AUD

• The pound-to-Australian dollar exchange rate fell heavily on Thursday as hawkish remarks from Reserve Bank of Australia Governor Michelle Bullock helped the AUD outperform.

• GBP/AUD fell below 1.94 as the Australian Dollar rallied, outperforming all G10 counterparts. Governor Bullock stated that inflation will likely take longer than expected to return to the 2% to 3% target band and that the RBA will not hesitate to raise interest rates again if necessary.

AUD/USD

• The AUD/USD pair trades stronger near 0.6575 during the early Asian session on Monday.

• Hawkish messages from the Reserve Bank of Australia (RBA) and hotter Chinese inflation data are providing some support to the Aussie.

• The RBA left the interest rate unchanged at 4.35% for the sixth consecutive meeting last week. Governor Michele Bullock highlighted the upside risks to inflation and reiterated that the RBA will raise rates if needed.

AUD/CNY

• Westpac analysts now forecast the first-rate cut will occur in February 2025, postponed from the previously expected November 2024. The hawkish stance of the Australian Central Bank is likely to underpin the AUD in the near term.

• Additionally, China’s Consumer Price Index (CPI) rose by 0.5% in July, supporting the AUD, though concerns about sluggish Chinese demand persist and might limit the pair’s upside.

• Traders will be watching Chinese Retail Sales and Industrial Production data on Thursday, as well as Australian employment data.

AUD/NZD

• While upcoming Aussie data on Tuesday may not be enough to break the pair’s recent range between NZ$1.0975 resistance and NZ$1.0880 support, the RBNZ holding its Official Cash Rate at 5.5% for a ninth consecutive meeting could support the NZD.

• This could potentially guide the AUD/NZD pair below current support, possibly testing the area.

AUD/JPY

• The AUD/JPY pair declined to 96.45 on Friday, resuming losses after three sessions of gains.

• Despite the decline, technical indicators suggest a shift towards neutral territory, with the RSI moving out of the oversold zone and the MACD showing decreasing red bars.

• In Friday's session, the pair declined by 0.65% to 96.45, extending its downward trajectory. 

Last Week 🗞️ Key Takeaways:

AUD: Under Pressure – Commerzbank

• The Australian Dollar (AUD) was under significant pressure, losing about 0.7% against the US Dollar (USD), according to Commerzbank’s FX analyst Volkmar Baur.

• The AUD was affected by lower-than-expected inflation, which reduced expectations for further rate hikes by the Reserve Bank of Australia (RBA). The RBA was due to announce Australia’s interest rate on Tuesday at 2:30 pm, with no expected change.

• The AUD's strong reaction also seemed tied to ongoing economic weakness in China, Australia’s largest trading partner. Weakness in China, especially in the housing market, could impact Australian exports and thus the currency.

USD Rally

• The USD had been steadily rallying against most major currencies recently, though the catalyst behind the move remained unclear.

• A significant factor appeared to be deleveraging from a strengthening Yen, which impacted other markets.

• As the Bank of Japan (BoJ) decision was now behind us, it would be interesting to see if this correlation with the Yen faded.

AUD/USD & NZD/USD

• Weaker US data pushed both AUD/USD and NZD/USD higher, indicating a lower USD.

• The Australian Dollar weakened against major peers following the release of Australia's quarterly inflation figures, which eased pressure on the RBA to raise interest rates again.

GBP/AUD

• The Pound to Australian Dollar exchange rate (GBP/AUD) rose to its highest level in 11 months at 1.9810 after Australia's headline CPI rose as expected by 1.0% quarter-on-quarter in the second quarter.

• Trimmed mean CPI, a core measure of domestic inflation, rose less than expected at 0.8% q/q, reducing market bets for further interest rate hikes by the RBA and increasing the chances of a rate cut by December.

AUD/JPY

• The AUD/JPY pair sustained a dominant bearish trend, with significant support around 95.30.

• On Friday, the pair recorded substantial losses with a 5% weekly decline after the Bank of Japan surprised investors by increasing interest rates to 0.25%.

Things to look out for this week; 

• Tuesday 13 August

  🇦🇺 Wage Price Index q/q - AUD

  🇬🇧 Claimant Count Change - GBP

  🇺🇸 Core PPI m/m - USD 

  🇺🇸 PPI m/m - USD 

• Wednesday 14 August

  🇳🇿 Official Cash Rate - NZD 

  🇳🇿 RBNZ Monetary Policy Statement - NZD 

  🇳🇿 RBNZ Rate Statement - NZD 

  🇬🇧 CPI y/y - GBP

  🇺🇸 Core CPI m/m - USD 

  🇺🇸 CPI m/m - USD 

  🇺🇸 CPI y/y - USD 

• Thursday 15 August

  🇦🇺 Employment Change - AUD

  🇳🇿 Unemployment Rate - NZD 

  🇬🇧 GDP m/m - GBP

  🇺🇸 Core Retail Sales m/m - USD 

  🇺🇸 Retail Sales m/m - USD 

  🇺🇸 Unemployment Claims - USD

• Friday 16 August

  🇳🇿 RBA Gov Bullock Speaks - AUD

  🇬🇧 Retail Sales m/m - GBP

  
  

AUD-USD 🇺🇸

Rates have increased slightly over the last week, sitting at 0.6583

(11 AM AEDT)

AUD-GBP 🇬🇧

Sitting 0.5159 the AUD - GBP has risen and continued in the same range since late July

(11AM AEDT)

AUD-NZD 🇳🇿

Rates have continued trading in the same range over the last week since the drop in late July at 1.0950

(11AM AEDT)

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