The Australian dollar is going nowhere

Photo: Getty Images.

The Australian dollar is treading water, sitting close to the same level it started Monday’s trading session.

Here’s the scoreboard as at 8.15am AEDT.

AUD/USD 0.7612 , -0.0004 , -0.05%
AUD/JPY 84.68 , -0.01 , -0.01%
AUD/CNH 5.0216 , -0.0013 , -0.03%
AUD/EUR 0.6440 , -0.0001 , -0.02%
AUD/GBP 0.5715 , 0.0001 , 0.02%
AUD/NZD 1.1067 , 0.0005 , 0.05%
AUD/CAD 0.9672 , 0.0003 , 0.03%

On what was an otherwise quiet session, Ray Attrill, Head of FX Strategy at the National Australia Bank, said the the US dollar found support following hawkish remarks from Robert Kaplan, Dallas Fed President, in an essay posted on the bank’s website.

“If we wait too long to see actual evidence of inflation, we may get behind the curve and have to subsequently raise rates more rapidly,” Kaplan said. “This type of rapid rate rise has the potential to increase the risk of recession.”

Along with Kaplan’s remarks, Attrill said the US dollar also got a boost from a tweet on the progress of US tax reform from US President Donald Trump.

“The US dollar looks to have drawn a little support from tax bill optimism — as well as the Kaplan comments — having earlier in the day gained a small lift from news that US New Home sales surged by 6.2% in October against expectations for a fall of 6.3%,” Attrill said.

As a consequence, that acted to weaken the Aussie dollar, seeing it give back gains achieved earlier in the session.

AUD/USD 5-Minute Chart

Turning to the day ahead, most interest will fall on key speeches from US Federal Reserve officials.

At 11am AEDT, Bill Dudley, New York Fed President, will speak on “The US economy, 10 years after the crises”.

That event will be followed by US Fed chair designate Jerome Powell who faces his first Senate confirmation hearing in Washington.

“Senate questioning might revolve around his ‘vision’ for the Fed, views on accountability and communications strategy. Yet doubtless he will also be quizzed on such matters as his view of whether weak inflation this year is largely the result of transitory factors,” says Attrill.

“Perhaps as or even more important for stock market, will be his replies to questions about where his support lies — or doesn’t — with respect to unwinding of various aspects of the post-GFC Dodd-Frank legislation.”

The Senate confirmation hearing is scheduled to begin around 2am AEDT.

Outside of those events, the calendar is light with Eurozone monetary statistics along with revised building permits, wholesale inventories, and house prices consumer confidence. The Richmond Fed manufacturing index in the US the only releases of note.

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