AUD buoyed as commodity prices offset depression in risk demand
Thursday 24 February, 2022
Daily Currency UpdateThe AUD outperformed the majority of major counterparts through trade on Wednesday as sustained strength across key commodity prices continues to offset weaker demand for risk. There was little to no reaction to yesterday's Wage Price data print as attentions remain squarely affixed to developments in Ukraine and with few new updates since Russia’s incursion on Tuesday market, movements were largely well contained as investors continue to sideline major bets. Having touched intraday highs north of 0.7280 the AUD corrected through the latter hours of the overnight session, retreating back below 0.7250 and within a more familiar trading range. With little headline data on hand to drive direction through Thursday all eyes remain on developments in Eastern Europe. With Ukraine and West preparing for war, Putin’s next move will prove critical in driving the underlying risk narrative. Should Russia pull back, expect a surge in risk demand and a possible extension in the recent AUD rally.
Key MoversPrice action across major currencies was largely muted through trade on Wednesday as commodity currencies outpaced their counterparts, while the euro and GBP edged lower. Demand for risk remains depressed and with few new developments emerging from Russia and the Ukraine, markets appeared content in sideling major bets. With the US, EU, UK, Australia, Japan and Canada all imposing sanctions on Russia, there is a real fear war will derail the global economic recovery and drive inflationary pressures higher still. War increases the burden on major central banks to control inflation pressures as the cost of key non-discretionary items like fuel and food continue to rise. With household expenses expected to rise across Europe a greater strain is placed on consumers, diminishing the likelihood of a consumer led recovery. With little of note on today’s ticket our attentions remain with developments in Eastern Europe.
- AUD/USD: 0.7170 - 0.7320 ▲
- AUD/EUR: 0.6320 - 0.6420 ▲
- GBP/AUD: 1.8580 - 1.9020 ▼
- AUD/NZD: 1.0650 - 1.0730 ▼
- AUD/CAD: 0.9180 - 0.9250 ▲