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Aussie falls below 0.76 after resurgent greenback takes centre stage

AUD - Australian Dollar

The Aussie opens this morning at 0.7595 after a dramatic fall during the American session. US dollar strength drove direction overnight as month-end speculators pushed the US dollar higher and consequently, the Aussie lower. Interestingly, there wasn’t too much on the economic calendar to drive direction and financial markets were messy to say the least, but there was certainly a flight to safety with the Greenback appreciating across the board. Adding fuel to the fire is the collapse of Archegos Capital Management which was forced to liquidate their assets in large blocks on Monday and added volatility to equity markets. The move to risk aversion undermined the Aussie and saw it tumble below the psychological level of 0.76 overnight.

Moving into Wednesday, the Aussie again enjoys a quiet day on the domestic docket with direction to be dictated by off-shore events.

Key Movers

The US dollar was the big winner overnight, improving 0.4% to 93.28 on the US Dollar Index. The Greenback enjoyed the support of a shift in risk sentiment and the month-end closing of positions which saw it as the big mover in overnight trading. At the centre of the shift to risk aversion was the collapse of Archegos Capital Management which saw ripples across equity markets, although it now appears the contagion is fairly limited. Nevertheless, Credit Suisse and Mitsubishi UFJ both succumbed to significant losses from the collapse. Across the Atlantic, the euro his a fresh four-month low below 1.1715 again on the back of US dollar strength.

Expected Ranges

AUD/CAD: 0.9489 - 0.9693 ▼

AUD/EUR: 0.6447 - 0.6512 ▲

GBP/AUD: 1.7995 - 1.8175 ▲

AUD/NZD: 1.0822 - 1.0931 ▲

AUD/USD: 0.7558 - 0.7633 ▼