Australia remains on a consistent path in terms of economic recovery following the pandemic, with forecasts continuing to better expectations after speedy vaccine rollouts.
Rising wages, jobs growth, and rising capital expenditure has painted a rosier picture for the economy moving forward into Q2 2021. Rising commodity prices have also added to the AUD’s strong performance this year, and China’s strong expected recovery is providing additional support.
The Australian GDP figures released on Wednesday showed the economy grew by 3.1% in the final quarter of 2020, bolstered by rising iron ore prices and strong consumer spending which left the NZD on the backfoot. However, with the central banks’ policies a long way apart, there is still potential for the NZD to gain if the Reserve Bank of New Zealand hints at increasing interest rates to cool their rising inflation.
Following the huge pullback last week after rising treasury yields in the US, the AUD has struggled to claw back its losses against the USD. Australian retail sales figures today came just under expectations which, although was a good result in the wake of the pandemic, failed to make a good impression on investors. Traders are now shifting their focus onto the US non-farm payroll report at the end of the week, which is forecast to show rising numbers of Americans out of work.
Although there has been successive positive data out for Australia, the AUD has been struggling against the GBP, with global equity markets preventing gains from the risk-correlated currency in recent weeks. The GBP has been holding steady as the markets prepare for lockdown restrictions to ease over the coming months and the UK economy looks set to spring back to life.
*Market update provided by our Travel Money Transfers partner SendFX Pty Ltd ACN 617 647 220 (‘Send’). Send holds an Australian Financial Services Licence (No. 509635) . 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.