The Australian Dollar has ticked higher last week, with the appeal of the currency being bolstered by an uptick in market sentiment as more countries prepare to reopen their economies.
AUD exchange rates were also supported by a bumper retail sales report, as sales growth struck a record high in March as a result of panic buying. However, it hasn’t been all plain sailing for the ‘Aussie’, with the risk-sensitive currency initially falling at the start of the week as it was undermined by US-China tensions, with Donald Trump threatening to reignite the trade war as he stepped up his criticism of Beijing’s handling of the coronavirus outbreak.
Also limiting the upside in AUD exchange rates through the first half of the week was the Reserve Bank of Australia’s (RBA) latest rate decision. This saw the RBA keeping leave it monetary policy unchanged as expected, but also signal that interest rates will not rise again until employment and inflation return to the bank’s target range, something which is unlikely to happen for some time.
Australian Dollar (AUD) Weekly Review
AUD/USD trading at: 0.6417 – Up a cent on the week’s high
AUD/GBP trading at: 0.5195 – Up a cent on the week’s high
AUD/EUR trading at: 0.5939 – Up over a cent on the week’s low
AUD/NZD trading at: 1.0654 – Up one cent on the week’s low
*Rates shown are market rates, not available to the public. Rates are current as at 6 May 2020
What’s happening this week that will likely affect the Australian Dollar
Looking to the week ahead, we are likely to find that the Australian Dollar remains highly sensitive to market sentiment, potentially extending its gains if more countries begin to ease their lockdown measures
There will also be some notable Australian data releases which are likely to influence AUD exchange rates next week, including:
• April’s jobs report
• NAB business confidence
• First quarter wage figures
The focus will no doubt be on last month’s jobs report, where a sharp rise in unemployment due to the coronavirus lockdown may take its toll on the ‘Aussie’ through the second half of the week.
In the wider market, investors will also be looking at the latest GDP figures from the UK and Germany as well as April’s consumer price index from the US.
*Forecasts provided by TorFX TorFX Pty Ltd. AFS Licence number 246838. The information on this website has been provided for general information purposes only and must not in any way be construed or relied upon as personal advice.
