Price action steadies after last week’s rollercoaster
Tuesday 21 June, 2022
Daily Currency UpdateThe Australian dollar edged higher through trade on Monday amid a broader improvement in risk appetite. With little new headline news and a largely quiet macroeconomic ticket markets looked to risk assets propelling key equity indices higher and propping up commodity currencies. Having opened at 0.6930 the AUD marked intraday highs at 0.6990 before shifting lower into this morning’s open. Following last week's turbulent activity, the AUD remains vulnerable to further downside moves and shifts in the broader risk narrative. Global headwinds remain in play and a break below supports at 0.6930 could trigger another move toward year-to-date lows. Our attention today turn to the RBA’s policy meeting minutes. With the RBA tipped to issue another 50 basis point hike in July any signal within the minutes that points to a more aggressive path to monetary policy normalisation could add some support to the AUD and prompt a move above 0.70 while any note of caution could prompt further downside.
Key MoversPrice action across major currencies was muted through trade on Monday as US markets enjoyed a public holiday Monday and investors set about recovering from last week's surge in volatility. A slew of commentary from key central bank figureheads offered few new insights into future monetary policy changes with speakers re-iterating what markets had already priced in. St Louis Fed President Bullard maintained a hawkish assessment of US economic activity and suggested the Fed must meet market expectations if it is to reign in inflation. ECB president Christine Lagarde affirmed the banks' commitment to raising rates in July and laid bare the case for a move away from negative rates, while Bank of England and MPC member Mann suggested the BoE needs to be more aggressive in its approach to monetary policy if it is to control inflation and avoid a sharp devaluation in the GBP. The Euro, GBP, and JPY showed little net move and are all down when compared with commodity led crosses.
Out attention this week remains on the risk narrative and central bank commentary. Canadian inflation data and a slew of manufacturing and services data from Europe and the US dominate the macroeconomic ticket.
- AUD/USD: 0.6880 - 0.7020 ▲
- AUD/EUR: 0.6580 - 0.6680 ▲
- GBP/AUD: 1.7480 - 1.7720 ▼
- AUD/NZD: 1.0960 - 1.1020 ▼
- AUD/CAD: 0.8990 - 0.9090 ▲