AU
CA
EU
HK
NZ
SG
UK
US
Daily Currency Update
Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools
IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited ABN 65 092 375 703 (trading as “OFX”) and its subsidiaries make no recommendations as to the merits of any financial product referred to in the website, email or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.
DISCLAIMER: OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this website. Read full disclaimer. OFX provides international money transfer services to private clients and business customers. Use our free currency converter, exchange rate charts, economic calendar, in-depth currency news and updates and benefit from competitive exchange rates and outstanding customer service.
OFX is regulated in Australia by ASIC (AFS Licence number 226 484). Read our Money Laundering Statement and Privacy Policy.
Aussie dollar range bound; beholden to the ebb and flow of risk aversion
AUD - Australian Dollar
The Australian dollar appeared poised to break back above 0.70 US cents through trade on Monday, following equities higher before a swift reversal in risk demand drove both the AUD and key equity indices lower. An increased appetite for risk helped push the AUD higher through out the domestic session with added support coming as the number of new COVID19 cases in Victoria fell. Testing resistance at 0.6990 the AUD’s upward momentum suggested a sustained surge in risk demand could see a break above 0.70. While the Nasdaq and ASX rallied the S&P 500 broke into positive territory for year before profit taking and a swift risk off move sent the AUD back below 0.6950.
The AUD remains range bound, entrenched within a narrowing band, shifting between 0.6930 and 0.6990. Volatility within narrowed ranges remains high as markets continue to battle expectations for a recovery and an ever-increasing uncertainty around the length and scale of the economic recovery. While there is hope the Victorian outbreak may have been controlled the number of new COVID19 cases around the world shows little signs of slowing. Florida alone reported 12 new cases through Monday while India battles to control the outbreak. With the global growth expectations waning risk demand rest solely with sustained and ongoing fiscal and monetary policy support. We expect the AUD will remain range bound through the short term battling to break outside broader ranges between 0.68 and 0.70.
Key Movers
The US dollar edged marginally lower when measured against a basket of key major counterparts. Optimism the pandemic’s resurgence in the US was reaching its peak continued through early trade on Monday as the rate of increase in new infections across key US hotspots slowed. Having drifted toward a one month low the dollar found support following reports California will re-impose strict lockdown measures, forcing the closure, of bars, restaurants, gyms, hair salons and other service providers in a bid to stem the spread of the virus in some of the hardest hit counties.
The Euro advanced through trade on Monday, up 0.4% and testing a break above 1.1350 having touched intraday highs at 1.1373. Optimism ahead of this weeks EU leaders summit helped bolster demand for the common currency as investors look to EU officials for further updates regarding the EU recovery fund. The current plan allows for 750 billion Euro’s to be distributed to the worst effected countries via a series of grants and loans. With the Netherlands, Denmark and Austria all questioning the issuance of grants and shared debt obligations investors will be keenly attuned to any amendments in the proposal and/or sings the current proposal may be derailed. Should EU leaders agree a package this week we could see an extended risk on move helping drive risk currencies higher and force haven assets lower.
Expected Ranges
AUD/USD: 0.6850 - 0.6990 ▼AUD/EUR: 0.6080 - 0.6180 ▼
GBP/AUD: 1.7890 - 1.8250 ▼
AUD/NZD: 1.0550 - 1.0680 ▲
AUD/CAD: 0.9380 - 0.9490 ▼