Home Daily Commentaries Aussie dollar breaks through 61 US cents

Aussie dollar breaks through 61 US cents

Daily Currency Update

AUD - Australian DollarThe Australian dollar rose through 0.61 US cents through trade on Friday, buoyed by a continued run in improved risk sentiment. The Australian dollar closed the week higher against the greenback, up nearly 1.37% for the day reaching a high of 0.6199, its highest level in the last 10 days. The Aussie regaining nearly 300 bps from its weekly low to retake the 0.61 handle on the back of broad-based selling pressure surrounding the USD which seems to have provided a boost to the Australian currency. Last week we saw a sharp jump in US jobless insurance claims which has added potency to an already sizeable drop in the US dollar since the Federal Reserve introduced new measures that were essentially intended to curb its strength. Locally talk of a third stimulus package in Australia that will support businesses that lose all their customers and would otherwise shutdown during lockdown has helped keep the Aussie strong after a good week. In the continued fight against the Coronavirus (Covid19) on Sunday night Australian Prime Minister Scott Morrison told all Australian not to go out in public with more than one other person while all public spaces including parks, playgrounds, skateparks and outside gyms will be closed from midday tomorrow. Looking ahead this week in Australia and all eyes will be on Wednesday’s Reserve Banks Monetary Policy Meeting Minutes and Building approvals. Followed by Friday’s release of both AIG Construction Index and Final Retail Sales for the month of February. On the data front in the US this week we will start on Monday with Pending Home Sales for the month of February. On Tuesday we will see the release of US Consumer Confidence. Finally on Friday all eyes will be on the US Unemployment Rate decision. From a technical perspective, the AUD/USD pair is currently trading at 0.6147. We continue to expect support to hold on moves approaching 0.6125 while now any upward push will likely meet resistance around 0.6200.

Key Movers

Last week the Greenback posted its biggest weekly decline against a basket of currencies as trillions of dollars’ worth of stimulus efforts by governments and central banks helped temper a rout in global markets driven by the coronavirus (Covid19) pandemic. The U.S. House of Representatives on Friday approved a $2.2 trillion aid package, the largest in American history, to help people and businesses cope with the economic downturn inflicted by the coronavirus (Covid19) outbreak. The United States now has 85,594 people counted as infected, up from 68,211 on Friday. Unemployment claims jumped to a record 3.3 million last week, from 281,000 the previous week and easily ahead of the previous record of 695,000 set in October 1982, only served to fuel market expectations that the Federal Reserve would pump more money into the economy. US Equities were also down 3.5% on Friday ending a three-day rebound for US equities, the first such streak of gains since mid-February.

Expected Ranges

  • AUD/USD: 0.5850 - 0.6250 ▲
  • AUD/EUR: 0.5330 - 0.5780 ▲
  • GBP/AUD: 1.9530 - 2.0450 ▲
  • AUD/NZD: 1.0050 - 1.0350 ▼
  • AUD/CAD: 0.8450 - 0.8650 ▲