WEEKLY CURRENCY OUTLOOK

• This week, we have US retail sales & AU labour market numbers releasing which are high impact.
• We saw a 2.2% rise in the AUD/USD over last week as a fall in USD highlights global weakness.
• Expecting the AUDUSD to range between 0.6680 and 0.6950 this week on technical analysis.

– US recession is beginning to be priced into financial markets, hence the USD weakness.
– US retail sales, contrary to the current economic climate, remains quite strong with an expected 0.5%m/m increase in US retail sales.
– On the other hand, a falling but still relatively sticky inflation and high interest rates is draining household spending power.
– US unemployment claims this week will also be a key indicator of the US labour market.
– Expecting US unemployment claims to increase slightly from last week’s reading, suggesting more individuals seeking government benefits due to rise in unemployment.
– If we continue to see USD weakness, we may see the AUD/USD break through 0.70 this week, a key would be to monitor the DXY index, which measures the USD against a basket of other currencies.
– We don’t expect to hear too much from the RBA’s minutes this week, but the key information to look for would be any hawkish comments alluding to further rate hikes or maintaining a pause until inflation falls back to 2-3%.