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AUD News: Currency Market Wrap Up – 7 May 2021

7th May 2021

The AUD has come under intense selling pressure this week as China has decided to “indefinitely suspend” all activities under the China-Australia Strategic Economic Dialogue.

Sino-Australia trade relations have deteriorated in recent months, with China restricting or banning imports of Australian goods, including beef and coal. Given that China is Australia’s largest trading partner, such disruption to the relationship is likely to harm the economy and bring down the AUD further still.


The AUD fell to the lowest level against the NZD in two months following the news from the NDRC, China’s economic planning agency. With tensions riding high between Australia and China, it is likely that New Zealand exports will receive a timely boost as talks break down. The RBA releases its Monetary Policy Statement on Friday, which is predicted to cement low interest rates for the next two to three years, and could diminish support for the AUD.


Unemployment figures out of the US created a surge back to the safe haven USD in the past 24 hours. This set the scene for a worse-than-expected official unemployment rate, which is due for release on Friday night. If the results are mirrored, this may undermine the economic recovery of the world's biggest economy, and the market could in turn quickly turn risk-off, which would weaken the Aussie.


The AUD has fallen against the Pound this week as falling Covid-19 case numbers in the UK have boosted market sentiment. Although we are still trapped in a tight range, a breakout could be imminent as the Bank of England meets shortly to discuss the outlook for the UK and its interest rate policy. An optimistic view here could put further selling pressure on the AUD. With a raft of US data due out over the next 48 hours, the AUD remains susceptible to changing appetite for risk.


*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.