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Aussie dollar trading near 0.74 US cents

Friday 18 March, 2022

Daily Currency Update

The Australian dollar is slightly stronger this morning when compared to the Greenback, trading a little over 1.1% amidst broad-based weakness in the Greenback.  The Australian dollar extended its recovery from Tuesday’s low of 0.7165 to reach a one-week high of 0.7393 by broad-based US dollar weakness. The AUD/USD pair has appreciated nearly 2.5% in a three-day rally to erase the reversal witnessed in the previous two days. In local news yesterday we saw the release of Australian Unemployment Rate figures by the Australian Bureau of Statistics. Australia's unemployment rate has fallen to its lowest level in over 13 years, dropping from 4.2 per cent to 4 per cent in new data released by the Australian Bureau of Statistics (ABS) today. The result largely beat market expectations, which expected a drop to 4.1 per cent. The last time unemployment sat at 4 per cent was in August 2008. Australia's unemployment rate has never fallen below 4 per cent since records began in 1978. Looking ahead and today in Australia there are no scheduled economic releases. From a technical perspective, the AUD/USD pair is currently trading at 0.7371. We continue to expect support to hold on moves approaching 0.7300, while now any upward push will likely meet resistance around 0.7440.

Key Movers

After yesterday’s  Federal Open Market Committee (FOMC) meeting, risk appetite has continued to recover.  US equities roared higher into the market close, with the S&P500 and NASDAQ closing 2.2% and 3.8% higher respectively.  In the United Kingdom, Bank of England raised its cash rate by 25bps overnight, as expected,  as inflation soars.  The Bank of England has responded to the likelihood that the war in Ukraine will push inflation to around 10% this year by raising interest rates back to the pre-pandemic level of 0.75%. The UK monetary policy committee (MPC) voted 8-1 to increase borrowing costs by 0.25 percentage points, the first time the Bank has raised rates at three successive meetings in more than two decades.

Expected Ranges

  • AUD/USD: 0.7250 - 0.7450 ▲
  • AUD/EUR: 0.6550 - 0.6750 ▲
  • GBP/AUD: 1.7700 - 1.7900 ▲
  • AUD/NZD: 1.0600 - 1.0800 ▲
  • AUD/CAD: 0.9200 - 0.9400 ▲