Home Daily Commentaries Australian dollar reaches eight-week highs

Australian dollar reaches eight-week highs

Daily Currency Update

The Australian Dollar rallied on Wednesday afternoon following positive leads from the release of data in China. Opening at 0.7176 against the US Dollar, the Aussie initially saw an initial drop to 0.7152 as poor New Zealand inflation figures across the Tasman dragged the local currency with it.
Any downside movement was quickly erased as the release of several data releases in China caused the Australian Dollar to shoot up to eight-week highs and a retest of the US 72 cent handle. China’s economy grew at 6.4% in the first quarter from a year earlier, while the biggest surprise was a major lift in industrial production figures reaching 8.5% year-on-year in March. Comfortably beating expectations of 5.9%, the growth of industrial production was its fastest in five years, causing the Australian dollar to reach intraday highs of 0.7205.
From a technical perspective, the AUD/USD pair is currently trading at 0.7178 after failing to gain any momentum whereby the US 72 cent resistance levels continue to be a major hurdle. We continue to expect support to hold on moves approaching 0.7140 as domestic employment figures will likely determine direction for the Australian Dollar heading into the long weekend.

Key Movers

The strong data set from China yesterday saw a boost to risk appetite in general as the greenback weakened against a basket of currencies during the Asian trading session. The Dollar Index (DXY) declined from the 97 handle to intraday lows of 96.82. Both the Australian and Kiwi were the main beneficiaries of Chinese impressive industrial production figures.
The Pound slipped lower on their own consumer price index release as the 12-month print came in at 1.9% and slightly missed expectations of 2.0%. Cable has slipped from weekly highs of 1.3130 to 1.3040 overnight as the Great British Pound movements continue to be determined by Brexit announcements.
There was little to take note otherwise overnight as investors look to close out their positions heading into the long weekend for Easter. Of note this evening to round off the short week of trading is the release of Retail Sales in the United States and the UK.

Expected Ranges

  • AUD/USD: 0.7120 - 0.7220 ▲
  • AUD/NZD: 1.0600 - 1.0730 ▲
  • GBP/AUD: 1.8000 - 1.8300 ▼