australian-dollar-bank-notes-calculator - AUD
  • Australian Dollar (AUD) trades at multi month highs despite Australia falling into economic deflation
  • Australian inflation -1.9% quarter on quarter in Q2
  • US Dollar slips ahead of Federal Reserve monetary policy announcement
  • US Congress still not agreeing on stimulus

The Australian Dollar US Dollar (AUD/USD) exchange rate is pushing higher for a fourth consecutive session on Wednesday after shooting to its highest level since April 2019. At 14:15 UTC, AUD/USD trades +0.5% at US$0.7186, as it looks to pierce US$0.7200.

The Australian Dollar is bounding higher against a weaker greenback despite data showing that Australia had moved into a period of economic deflation. Inflation, as measured by the consumer price index declined -1.9% quarter on quarter between April – June thrusting the county into deflation for the first time in 22 years.

This was the largest slump in inflation in the 72-year history that records have run. The Australian Bureau of Statistics said that the drop was fuelled by falling childcare costs thanks to a federal government support scheme and falling petrol prices.

The risk sensitive Aussie Dollar was also receiving some support from upbeat vaccine news after Moderna’s vaccine candidate protects 16 monkeys against coronavirus infection. This is an encouraging step ahead of Phase 3 human trials which start on Monday.

Looking ahead, Australian building permits could attract some attention in the Asian session. Analysts are expecting a rebound in June to 0% after a -16.4% decline in May.

The US Dollar is heading southwards as investors await the Federal Reserve monetary policy announcement. The Fed is not expected to adjust monetary policy given the dozens of programmes that have been implemented over recent months.

Whilst the Fed will be in a wait and see mood, investors will be listening to the Fed’s tone carefully. The Fed are expected to remain very dovish as rising coronavirus numbers threaten to hamper the fragile economic recovery. Consumer confidence is falling and the recovery in the labour market has stalled.

Adding to the Fed’s challenges and the unfavourable climate there is still some distance between the Democrats and Republicans in Congress for a stimulus package.

 


Currencylive.com is a news site only and not a currency trading platform.
Currencylive.com is a site operated by TransferWise Inc. ("We", "Us"), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.