Daily Currency Update

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AUD edges back towards 0.77

AUD - Australian Dollar

The Australian dollar advanced through trade on Tuesday pushing toward intraday highs at 0.7670. The RBA elected to maintain its current policy setting while affirming interest rates will likely remain on hold through 2021, 2022 and 2023. Policymakers did acknowledge a stronger than anticipated post pandemic recovery, highlighting improving labour market conditions amid expectations the unemployment rate will continue to fall as the domestic economy opens up and the global growth outlook improves. With little new news proffered by the RBA, this month's policy meeting had little impact on AUD value with the currency maintaining a narrow range between 0.7605 and 0.7670. With other commodity currencies under pressure through Tuesday and little headline data on hand to drive a fundamental shift in direction, we point to variable currency market flows as the driver of direction through the first post Easter session.

With little of note on today’s macroeconomic ticket our attentions remain with broader flows and risk appetite. We expect the AUD to bounce between 0.7550 and 0.7720 through the short term.

Key Movers

Price action across major currencies was mixed through trade on Tuesday and investors looked to adjust positions after the Easter long weekend. The dollar index edged marginally lower as the euro climbed through 1.18 and 1.1850 while the Great British pound gave up 1.39 to touch intraday lows at 1.3801. With little headline data on hand and no real change in the pandemic narrative there appears little catalyst for the contrasting flows, and we can only surmise that standard variations are responsible.

With little of note on today’s ticket we expect another quiet day ahead. British Prime Minster Boris Johnson affirmed the governments' commitment to unfasten restrictions and open up the economy with retail shopping and outdoor dining soon to be resumed. As the UK continues to enjoy a sharp decline in COVID-19 case numbers and pushes its aggressive immunisation schedule we expect sterling will remain well-supported through the short term with resistance on moves approaching 1.40 intact for now.

Expected Ranges

AUD/USD: 0.7530 - 0.7720 ▲

AUD/EUR: 0.6390 - 0.6480 ▼

GBP/AUD: 1.7880 - 1.8220 ▼

AUD/NZD: 1.0790 - 1.0880 ▲

AUD/CAD: 0.9550 - 0.9690 ▲