AUD - Australian Dollar
The Australian dollar enjoyed a sharp uptick through trade on Wednesday, advancing through resistance amid a heightened demand for risk. Equities across Europe and the US continued to test record highs, dragging commodity currencies upward; signalling a shift away from the recent downtrend. Having struggled to break above resistance at 0.7640 through the local session, the AUD surged through 0.77 overnight marking intraday highs at 0.7740. With little of note on the macroeconomic ticket and optimism for a swift vaccine led recovery faltering, there was little impetus outside technical support and resistance levels driving the overnight move. Demand for risk has steadily improved through the week thus far helping shift demand back toward the AUD.
Attentions today turn to the March unemployment report. With the labour market recovering quickly from the throes of the pandemic, ongoing improvements and a dip toward 5.5% could help drive further AUD upside and a push toward 0.78US cents.
The USD underperformed through trade on Wednesday leading traditional safe-haven currencies lower amid increased appetite for risk. Having broken below 92 earlier this week, the dollar index extended losses below this key support handle marking intraday lows at 91.59 before edging higher into the Australasian open. With little data or news on hand to drive direction, technical factors appear responsible for the shift in direction this week, perhaps driven by expectations for extended accommodative monetary policy. Reports Denmark has suspended use of AstraZeneca’s COVID-19 vaccine when coupled with data suggesting Johnson and Johnson's viral vector vaccine faces similar clotting concerns and the Sinovac vaccine efficacy rate is barely above 50% and investors have been forced to extend the timeline of expectations surrounding a full-scale economic and global recovery and with that the period of accommodative monetary policy. With central banks globally adamant they will not remove current stimulus measures until a sustained recovery is evident, an extension in that timeline has helped spur gains across Wall Street and European equities dragging risk assets higher.
Attentions today turn to US retails sales for macroeconomic direction.
0.7600 - 0.7810 ▲AUD/EUR:
0.6380 - 0.6520 ▲GBP/AUD:
1.7680 - 1.8120 ▼AUD/NZD:
1.0780 - 1.0850 ▼AUD/CAD:
0.9580 - 0.9720 ▲