Daily Currency Update

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AUD consolidates gains around 0.7365

AUD - Australian Dollar

The Aussie dollar consolidated gains below the 0.74 handle overnight, albeit in a relatively thin market as the United States heads into Thanksgiving. Opening this morning at 0.7362, the Aussie dollar traded within a thin band on Thursday, oscillating between 0.7354 and 0.7374 but never quite finding the impetus to push through this range, despite the US dollar falling against a basket of currencies. Moving into another quiet day on the economic calendar, the Aussie dollar will again trade on global risk sentiment.

The Aussie dollar has continued to enjoy this period of positive risk-on sentiment as the combination of vaccine news, the beginning of the Biden transition and Janet Yellen’s new appointment spurred risk activity globally. Adding further momentum to the Aussie was signs that Iron ore prices will have a good year in 2021, with the price inching slightly higher as well. Turning to equities, the Dow traded above 30,000 points and the S&P500 closed at a fresh all-time high, which encouraged the ASX to close up 0.59% and hit a 9-month high earlier in the week. Overall, the news has been bullish of late, which has helped the Aussie immensely to a 3-month high.

Moving into the close of the week, the Aussie has very little to digest to drive direction with momentum to come again from off-shore news flow.

Key Movers

The Great British pound softened overnight, falling 0.2% against the US dollar to open this morning at 1.3350 after Brexit again took center stage. The latest news out of the UK was that a deal was unlikely before the weekend with next week a more realistic expectation. The frustrations at the torturous negotiations played its part on FX markets with the sterling feeling the pinch, albeit only marginally in the grand scheme of things.

The US dollar also saw a softening, although again it was fairly muted. USD/CHF and USD/JPY both fell approximately 0.2% with the USD/CHF in particular, falling to a multi week low at 0.9060. Overall, within the current thin market environment the movements were modest.

Expected Ranges

AUD/CAD: 0.9531 - 0.9646 ▲

AUD/EUR: 0.6141 - 0.6223 ▲

GBP/AUD: 1.8033 - 1.8234 ▼

AUD/NZD: 1.0456 - 1.0561 ▼

AUD/USD: 0.7317 - 0.7411 ▲