Send Weekly Currency Update 22nd July 2024

Send Currency Update for July 22, 2024. This update is designed to help you stay informed with the latest market conditions, key developments to monitor this week, and a review of what impacted the currency markets last week.

In the News This Week.

AUD/USD

• US President Joe Biden's exit from the presidential race increased the odds for former President Donald Trump and boosted investors' appetite for riskier assets.

• Experts argued that Biden’s decision would increase market volatility, though the market reaction has been limited so far.

• Peter Earle, senior economist at the American Institute for Economic Research, stated that investors may seek a safe haven until they can assess Biden’s replacement's policies.

• Dovish Fed expectations prompted fresh US Dollar selling.

• Pairs where AUD is the weaker currency, such as EURAUD and GBPAUD, are now in focus.

AUD/NZD

• AUDNZD remains in a tight trading range between 1.1055-1.1155, looking for direction. 

• The weakening of the AUD hasn’t impacted the AUDNZD rate in the same way as other major currencies. 

AUD/GBP

• Trending downwards since the 10th of July, dropping over 2%.

• Price action on the AUDGBP 1-hour chart touched the lower trend line in this bull run.

AUD/EUR

• The European interest rate decision on Thursday evening was held at 4.25% as expected, though the AUD continues to lose ground.

• The AUDEUR rate has also dropped nearly 2% in the last two weeks, showing AUD is weakening against most of the major currencies.

AUD/JPY

• The AUDJPY rate has dropped from the yearly highs towards the 105.00 mark. This has been a support/resistance point over the last few years so make need some major news to push back below this level.

• The Moving Average Convergence Divergence (MACD) showed flat red bars, indicating a pause in the previous intensified selling activity.

Last week 🗞️ Key Takeaways:

AUD Outlook and Market Performance

• Rabobank predicted continued outperformance for the Australian Dollar (AUD).

• Rabobank anticipated the RBA would raise interest rates twice in 2024, in August and November, to combat persistent domestic inflation.

• Jane Foley, Senior FX Strategist at Rabobank, stated, "Most recent Australian economic data have cemented our expectations for further rate hikes this cycle."

AUD/USD

• The pair started trading weaker around 0.6770 in the early Asian session on Monday, though it regained momentum.

• AUD traded around a six-month high of 0.6798, supported by a weaker USD following softer-than-expected US CPI data in June.

• Expectations for a potential Federal Reserve (Fed) rate cut in September rose.

• Traders awaited the Michigan Consumer Sentiment Index and US Producer Price Index (PPI) for further US economic insights.

AUD/NZD

• The pair traded at 20-month highs following the RBNZ decision last week to hold interest rates at 5.5%.

• The RBNZ signaled a rate cut later this year, pressuring the NZD.

• High inflation in Australia drove strength in the Aussie, with the RBA eyeing inflation data closely.

Gold Price 

• Gold traded near $2,405 on Monday, pressured by higher-than-expected US Wholesale price inflation in June.

• Gold rallied within a range, approaching its May 20 all-time high of $2,450.

• Instead of forming a topping pattern, Gold might have been in a sideways consolidation, pausing within a broader uptrend.

• Short-term, Gold appeared in a sideways trend, with a floor around $2,280 and a ceiling at $2,450.

Things to look out for this week; 

• Wednesday 24th July

  🇫🇷 French Flash Manufacturing PMI - EUR

  🇫🇷 French Flash Services PMI - EUR

  🇩🇪 German Flash Manufacturing PMI - EUR

  🇩🇪 German Flash Services PMI - EUR

  🇬🇧 Flash Manufacturing PMI - GBP 

  🇬🇧 Flash Services PMI - GBP 

  🇨🇦 BOC Monetary Policy Report - CAD

  🇨🇦 BOC Rate Statement - CAD

  🇨🇦 Overnight Rate - CAD

  🇺🇸 Flash Manufacturing PMI - USD 

  🇺🇸 Flash Services PMI - USD 

• Thursday 26th July

  🇨🇦 BOC Press Conference - CAD

  🇺🇸 Advance GDP q/q - USD 

  🇺🇸 Unemployment Claims - USD 

• Friday 27th July

  🇺🇸 Core PCE Price Index m/m - USD 

AUD-USD 🇺🇸

Rates have had a slow decline since last week at 0.6687.

AUD-GBP 🇬🇧

Sitting 0.5173 the AUD - GBP has continued it’s decrease since this time last week.

AUD-NZD 🇳🇿

Rates have kept within a band of 1.1120.

AUD-EUR 🇪🇺

AUD to the EUR has continued a decline since last week at 0.6138.

If you’d to learn more, reach out to our International Currency Specialist, Ian Cragg from Sebd Payments.

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