Aussie dollar rallies on the back of the upbeat market sentiment
Monday 30 May, 2022
Daily Currency UpdateThe Australian dollar is stronger this morning when valued against the greenback. The Australian dollar reclaimed the 0.7100 mark reaching a fresh three-week high, up 0.83%. The Australian dollar is currently trading at 0.7156 reflecting upbeat market sentiment amid the release of high US inflation. On Friday we saw the release of Retail Sales for April which rose by 0.9% as expected, marking a rise for four consecutive months, depicting the resilience of consumers, albeit a higher inflation reading, around 5.1% in the Q1.
Looking ahead this week on the data front and Monday we will see the release of monthly Building Approvals. On Tuesday the Australian Bureau of Statistics will release Gross Domestic Product (GDP) Q1. The forecast expects to see a rise of 1.2% adding that "Growth momentum probably slowed in Quarter One as economic activity was interrupted by the Omicron wave and floods in Queensland and NSW". On Wednesday we will see the release of both Trade Balance data and Retail Sales figures in Australia the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Key MoversLast week saw a big turnaround in risk appetite. On the data front last week the US Department of Commerce revealed that inflationary pressures in the US are still high but lower than in March. The Core Personal Consumption Expenditure (PCE) rose by 4.9% YoY, higher than the recorded in March of 5.1%. In the same release, consumer spending increased by 0.9% in April and beat the street’s forecast as consumers boosted purchases of goods and services, a sign that could underpin US economic growth in the Q2 amid increasing worries of a recession. Looking ahead this week in the US and on Monday it is a Bank holiday closed for Memorial Day. On Thursday we will see the release of May ISM Manufacturing and the business related PMIs a survey of about 300 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Friday we will see the release of nonfarm payrolls where markets are looking for a 325k increase in jobs and a 0.1% fall in the unemployment rate to 3.5%, which would match its pre-Covid lows.
- AUD/USD: 0.7050 - 0.7250 ▲
- AUD/EUR: 0.6550 - 0.6750 ▲
- GBP/AUD: 1.7550 - 1.7750 ▼
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.9000 - 0.9200 ▲