AUD falters into weekly close amid rise in risk aversion
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Daily Currency Update
The Australian dollar was the worst performer through trade on Friday, down near a quarter percent amid a risk off shift that enveloped markets leading into the weekly close. Having given up fresh 2025 highs above US$0.64 the AUD slid to session lows only marginally above US$0.6350. Uncertainty surrounding the new Trump administration's economic policies and a sell off across US equities sparked a sharp uptick in risk aversion driving markets to haven assets and away from the AUD. Friday’s correction saw the AUD unwind much of the hard-fought gains won earlier in the week forcing it to close the week in much the same position as it started, up just 0.08%.With little note on today’s domestic ticket, we look offshore again. US consumer sentiment data heads the macro ticket, while geopolitical developments and US trade policy drive wider market sentiments.
Key Movers
The US dollar ended the week higher amid a risk off tone that engulfed markets leading into the weekly close. Having fallen following weaker than anticipated services PMI data wherein activity fell to its lowest level since January 2023 the USD faced added pressures in a softer consumer sentiment print before a sharp sell across equity markets and increasing risk aversion generated by growing political uncertainty fueled risk aversion leading into the weekly close. Doubt and indecision surrounding the Trump administration's economic policies have weighed on investors, businesses, and consumers alike. The Japanese Yen was the only major to out perform the USD, buoyed by the risk off pivot and a surge in domestic bond yields. The British Pound slipped back below 1.2650 while the Euro gave up 1.05 and 1.0450 before a strong opening this morning. The Euro has bounced back toward 1.05 on open amid reports Friedrich Merz will likely be the next Chancellor of Germany.Our attentions today remain with the German election as the outcome is still too close to call and Merz CDU/CSU alliance will likely need to draw in other minor parties to form a coalition if it is expected to foster a majority. On the macro front, German IfO business data and expectations are released while the US Conference Board releases more consumer data.
Expected Ranges
- AUD/USD: 0.6250 - 0.6420 ▼
- AUD/EUR: 0.5980 - 0.6120 ▼
- GBP/AUD: 1.9750 - 1.9950 ▲
- AUD/NZD: 1.1020 - 1.1120 ▲
- AUD/CAD: 0.9000 - 0.9100 ▼