Aussie recovers to end the week relatively unchanged
Monday 26 April, 2021
Daily Currency UpdateThe Aussie staged a late Friday surge to appreciate 0.53% and open this morning at 0.7748. Despite the healthy appreciation of the Aussie, the pair remained relatively flat when compared on a weekly basis.
The Aussie gained traction during the American session primarily due to the Greenback coming under broad-based selling pressure as risk sentiment turned positive. Equity markets led the way with the main indexes all pushing higher from the opening bell. As it usually does, the Aussie followed suit and found increased buying demand throughout the Friday session. Adding to the Aussie's fortunes was better than expected PMI data from the US private sector, which only added further impetus to the Bulls. The data confirms that the US private sector continues to expand at an unprecedented pace although the positive narrative is tempered when considering input prices also continue to rise sharply. Nevertheless, signs of a quick recovery from the COVID recession continue to be compelling and risk-aligned currencies such as the Aussie, benefitted from the welcome news.
Moving into the last week of April, the Aussie enjoys a slow start to the week before turning to q/q CPI data on Wednesday. Thursday will also be interesting with the US FOMC statement and GDP numbers slated for release.
Key MoversThe US Dollar dominated market movements on Friday with the world's reserve currency sold off across the board. The US Dollar Index reflected the sell off, falling 0.55% to 90.83. The move into negative territory was primarily spurred on by risk assets as the Bulls came back to the forefront in global financial markets. Adding fuel to the fire was Services and Manufacturing PMI released by IHS Markit which came in well above analysts expectations at 60.6 and 63.1. The positive report supported the COVID recession quick recovery narrative and helped provide momentum to risk sentiment. Nevertheless, interestingly the report also noted that input prices continue to increase which may have consequences for Inflation moving forward. The supply side issue helped the 10-year Treasury bond yield move into positive territory and also limited the Greenbacks decline.
Across the Atlantic the Euro was the best performer for the day, appreciating 0.68% against the Greenback. Aided by a softening US Dollar, the Euro surged ahead on Friday to open this morning at 1.20965. The move upwards was also assisted by Europe's own set of PMI data out of France and Germany. While the data was mixed, it was a solid result overall with France's Services PMI outperforming expectations but falling slightly short on the Manufacturing side. Germany enjoyed the opposite effect however with Manufacturing PMI outperforming expectations and Services PMI missing the forecast. Adding further momentum to the shift upwards was news that Europe's vaccination campaign has taken some significant strides and has now gained some much needed pace.
- AUD/CAD: 0.9612 - 0.9728 ▲
- AUD/EUR: 0.6367 - 0.6444 ▼
- GBP/AUD: 1.7796 - 1.8011 ▼
- AUD/NZD: 1.0701 - 1.0830 ▼
- AUD/USD: 0.7702 - 0.7795 ▲