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Australian dollar consolidates above 75 US cents

Monday 28 March, 2022

Daily Currency Update

The Australian dollar continued its bullish run on Friday climbing above 75 US cents and its highest weekly close since October 2021. A rally in equity prices to its highest close in more than two months benefited the domestic currency following a 1.5% lift for the ASX200 Index for the week. Opening at 0.7512, the AUD/USD cross lifted to an intraday high of 0.7537, strengthened by rising commodity prices before finishing the week at 0.7514. Brent crude was up $1.62 (1.4%) on the day to $120 a barrel following a missile attack on an oil distribution facility in Saudi Arabia as traders assessed the impact on global supplies. The Australian dollar opens this morning at 0.7503. This week we see the Australian Treasurer Josh Frydenberg deliver the 2022-23 Federal Budget due for release on Tuesday evening with markets keeping an eye on a temporary cut to fuel excise levies.  We expect support levels to hold onto moves approaching 0.7480 while any upward push will likely meet resistance at October 2021 highs of 0.7555.

Key Movers

The US Dollar Index (DXY) which measures a basket of currencies against the greenback was higher for the third day in a row. Fuelled by rising inflation, the US Dollar could be set for further advances as markets price in another 50 basis points in interest rate rises by the FOMC due at their next meeting on May 4. The DXY closed at 98.80 (up 0.04%) despite US consumer sentiment hitting a 11-year low as global inflation projections are now expected to peak above 5.0% in 2022. University of Michigan's one-year inflation expectations were revised upwards in the United States to 5.4% on Friday. The greenback retreated from its recent surge against the Japanese yen as profit-takers pushed prices down 0.2% to 1.2208. The pound was also flat closing at 1.3180, dampened by a drop in retail sales in the United Kingdom and consumer confidence levels. Next week is set to be dominated by a plethora of employment data prints due for release in the United States. Geopolitical uncertainty is likely to be a major theme in markets this week as the conflict between Russia and Ukraine enters its fifth week. Equities saw its second straight week of gains despite a jittery end to the week as the first quarter of 2022 comes to a close.

Expected Ranges

  • AUD/USD: 0.7480 - 0.7555 ▲
  • AUD/EUR: 0.6800 - 0.6900 ▲
  • GBP/AUD: 1.7300 - 1.7600 ▼
  • AUD/NZD: 1.0750 - 1.0850 ▲
  • AUD/CAD: 0.9300 - 0.9400 ▼