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AUD falls 0.95% but holds just above 0.72

Monday 17 January, 2022

Daily Currency Update

The Australian dollar struggled on Friday, falling 0.95% to open this morning at 0.7211. Weighed down by risk-off moves in equity markets as well as Omicron concerns domestically, the Aussie fell steadily through Friday trade. In what proved to be a day of two halves, the Aussie initially started in positive territory slightly north of 0.73. The break above 0.73 was the first time the Aussie crossed the level since November 2021. Ultimately, however momentum shifted rapidly with the Aussie falling on the back of poor retail sales figures from the US. The contraction in the US retail sector spurred on a flight to safety and saw a broad-based sell-off in risk assets. Adding fuel to the fire were reports that Westpac saw a sharp decline in card spending for the first two weeks of January; potentially signaling that Omicron is weighing on the economy and perhaps the RBA's future thinking. Moving into the new week, the Aussie looks to China for direction with Chinese GDP figures set to take center stage.

Key Movers

The US Dollar Index rose 0.4% to open this morning at 95.17. Aided by a broad-based risk-off tone, the greenback shrugged off poor retail sales figures and PPI numbers to break the downward trend it had faced throughout the week. Despite the late comeback at the weekly close, the greenback remains fragile if data continues to be mixed. That being said, volatility is tempered somewhat when considering the hawkish tone of the FOMC. Either way, US data releases will continue to be of keen interest to market participants.

Expected Ranges

  • AUD/USD: 0.7167 - 0.7254 ▼
  • AUD/EUR: 0.6271 - 0.6347 ▼
  • GBP/AUD: 1.8834 - 1.9061 ▲
  • AUD/NZD: 1.0522 - 1.0649 ▲
  • AUD/CAD: 0.8989 - 0.9098 ▼