AUD rallies as commodity currencies edge higher

OzForex Research OzForex Foreign Exchange

Daily currency update

The Australian dollar and local share market were swept up in the relief rally that galvanised global markets on Friday, as fears that aggressive tightening by central banks to control surging inflation will trigger a global recession moderated. A modest bounce in risk sentiment as equity markets closed out the week on a firmer note. Going forward, risk sentiment will continue to drive price action for the Aussie with the current upside likely to struggle around resistance at 0.6960 and 0.7000 above. What’s more, reports that China will strictly limit citizens from going abroad, suggests that the outlook will continue to look gloomy. On the data front there are no scheduled releases today. Looking ahead this week and on Tuesday we will see the release of the Reserve Bank of Australia Monetary Policy Meeting Minutes. A detailed record of the RBA Reserve Bank Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. On Thursday the Australian Bureau of Statistics will release the Unemployment Rate announcement which is forecast to drop from 4.0% to 3.9% while adding a further 30k jobs.

Key movers

Key Mover on Friday Wall Street closed out another volatile week of trading with a broad rally though it wasn’t enough to keep the market from its sixth straight weekly drop, the longest such streak since 2011. The S&P 500 climbed 2.4 per cent. More than 90 per cent of the companies in the benchmark index closed higher. The Nasdaq rose 3.8 per cent as more gains in technology companies helped lift the tech-heavy index. The Dow Jones Industrial Average rose 1.5 per cent. Bond yields rose significantly. The yield on the 10-year Treasury rose to 2.93 per cent from 2.82 per cent late Thursday. The price of US crude oil rose 4.1 per cent to settle at $US110.49 per barrel which is now up about 50 per cent for the year.

Expected ranges

AUD/USD: 0.6820 – 0.7020 ▲
AUD/EUR: 0.6550 – 0.6750 ▲
GBP/AUD: 1.7550 – 1.7750 ▼
AUD/NZD: 1.0900 – 1.1100 ▲
AUD/CAD: 0.8850 – 0.9050 ▲

Author

OzForex Research

OzForex Foreign Exchange

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