The Australian dollar has been up 1.54% this past week against the US Dollar and down 1.68% this past week against the Euro. Economic releases this past week have been favourable for the EUR as compared to the USD which has also gone ahead and impacted the AUD markets.
Coming up, the Reserve Bank of Australia is all set to release its interest rate decision for the month. Analysts believe that the bank has taken a break from rate increases due to the inflation crisis slowing down in the region. The rate is expected to remain unchanged at 3.85%.
Also ready to release its interest rate decision for the month is the Bank of Canada. The BOC is also under the impression that there is no need for further rate hikes at the moment. As a result, analysts believe that the rate will remain unchanged at 4.5%.
Finally, the US is going to release its Services PMI data for the month of May which helps us understand the business conditions in the non-manufacturing sector. The data is currently at 51.9%, and analysts believe that it is going to drop to 51.5% which is bearish for the USD.
The AUD/USD currency pair started the week in relatively stable market conditions. However, the market saw an upward boost after the release of poor economic data from the US. The market reached a weekly high of 0.663 before ending the week at 0.660.
This past week, Australia released its Building Permits data which helps us understand if the level of economic development in the country has changed. The data revealed that the number of building permits issued had dropped quite significantly. The numbers were previously at -1%, and analysts expected it to increase to 2%. However, it dropped significantly to -8.1%.
In other news, the US also released data for its Non-Farm Payrolls, which tells us whether any new jobs were created in the agricultural sector last month. The data revealed an increase in agricultural jobs from 294K to 339K. Analysts expected jobs to drop to 190K.
Even though it did drop out of the 0.65-0.68 range for a few days, it has made it's way back into this area for now. All eyes will be on the RBA decision to see if it can stay there.
The EUR/AUD currency pair has been in the red zone this past week owing to the strength of the Australian Dollar after the release of the Consumer Price Index. The pair started the week at 1.647 before quickly going downhill and ending the week at a weekly low of 1.620.
Australia released its Consumer Price Index, which reveals whether the purchasing power of its residents has been impacted by inflation. The CPI data came out higher than expected, which reveals an increase in purchasing power from 6.3% to 6.8%.
The EU’s Core CPI data was also released which revealed that the purchasing power of its residents has decreased as a result of the ongoing inflation crisis. Core CPI data was previously 5.6%, but it recently dropped to 5.3%.