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AUD/USD rises 0.61% despite global risk-off sentiment

Friday 11 March, 2022

Daily Currency Update

Sentiment in asset classes was again mixed in overnight trade with equities falling and safe havens rising. Nevertheless the commodity currencies outperformed with the Australian dollar no exception. The Aussie rose 0.61% to open this morning at 0.7362. Attentions were again focused primarily on the war in Ukraine which has now entered its 16th day. Sentiment shifted markedly as it came to light that no concrete evidence of a ceasefire or truce was forthcoming despite President Zelenskys attempts at an olive branch and the meeting in Turkey. With risk off being the flavour of the day, safe havens rose accordingly with the yen, Swiss franc, US dollar and Gold accommodating. Within this environment commodity currencies, such as the Aussie, again outperformed despite the fall in the price of Brent Crude. Aluminium, Copper, Gold and Iron led the way in commodity markets, with Iron in particular appreciating by 1% and Aluminium spiking an absurd 6% after Rio Tinto declared they would stop supplying a Russian refinery. The rise in commodities helped the Aussie push its way higher within the 73s. Looking at the calendar today there is very little to digest. RBA Governor Lowe does speak this morning in Sydney, but the key focus will of course remain on the war in Ukraine.

Key Movers

Currency markets were again volatile as we enter the last day of the week, with the euro and Great British pound in particular recording the largest losses in overnight trade. The euro recorded a 0.81% fall to open this morning at 1.0983 and the Great British pound followed closely with a 0.74% depreciation to 1.3088. With hopes of an imminent ceasefire or truce in Ukraine subsiding, risk sentiment swiftly turned away from European currencies (besides CHF) and saw a wholesale flight to safe-haven currencies. Nevertheless, there was some respite during intraday trade when the ECB released its monetary policy statement. To the surprise of the market the ECB outlined a plan to accelerate their QE tapering schedule and opened the door to possible rate hikes as early as July, despite the ongoing war in their neighbourhood. The euro spiked immediately after the hawkish surprise and even traded as high as 1.11 before the market again turned against it, perhaps disappointed at the consequently reduced growth outlook.

Expected Ranges

  • AUD/USD: 0.7289 - 0.7436 ▲
  • AUD/EUR: 0.6634 - 0.6768 ▲
  • GBP/AUD: 1.7605 - 1.7961 ▼
  • AUD/NZD: 1.0650 - 1.0778 ▼
  • AUD/CAD: 0.9341 - 0.9454 ▲