AUD recovers break below 0.74 as US rates fall
Thursday 14 April, 2022
Daily Currency UpdateThe Australian dollar remained stubbornly entrenched within recent ranges, bouncing between 0.74 and 0.7470 through trade on Wednesday. With little of note on our own domestic docket, we looked offshore for direction through the local session and enjoyed a brief rally above 0.7470 following the RBNZ decision to accelerate its pace of rate hikes, lifting the official cash rate by 50 basis points. The upswing was quickly quelled and the AUD turned lower as the RBNZ offered a dovish assessment of local conditions and refused to be drawn on meeting the market's expectation for a neutral cash rate. The Australian dollar slipped through 0.7450 and a subdued demand for risk forced the currency toward intraday lows below 0.74 at 0.7394. The AUD found some support through the overnight session as the USD came under pressure following a fall in US rates. Rising steadily through the early hours of Thursday morning, the AUD is now trading back above 0.7450 US cents. Our attentions turn now to the ECB policy meeting and US retail sales, while domestic unemployment data headlines the local ticket. The unemployment rate is expected to fall to a 48-year low of 3.9% as a further 50,000 new jobs were added to the economy. A strong read could support calls for a May RBA rate hike possibly pushing the AUD back through 0.75 US cents leading into the Easter long weekend. Please note: There will be no commentary over the Easter holiday period. Daily commentary will return on Tuesday the 19th of April.
Key MoversVolatility abounds with plenty of price action across major currencies through trade on Wednesday. The US dollar advanced against most counterparts early forcing the euro toward 2-year lows near 1.0810, pushing the GBP below 1.30 and peaking above a 20-year high against the yen at 126.32. Having touched 20-month highs the dollar then corrected following a fall in US rates through the overnight session allowing a recovery across the board. The euro pushed back toward 1.09 while the GBP pushed back through 1.31 and the JPY forced the dollar back below 1.26. Our attentions turn now to the ECB policy meeting where it is widely expected policymakers will announce an end to bond purchases before H2 with a rate hike through the second half of the year— the first rate hike in a decade.
- AUD/USD: 0.7380 - 0.7550 ▼
- AUD/EUR: 0.6780 - 0.6920 ▼
- GBP/AUD: 1.7350 - 1.7700 ▲
- AUD/NZD: 1.0850 - 1.1020 ▲
- AUD/CAD: 0.9290 - 0.9430 ▼