There was turmoil in the stock markets this week following a big sell-off across Wall Street’s tech stocks while commodity prices continued to rise. The AUD has been kept afloat by the surging price of iron ore and strong performance within the ASX 200. Analysts predict the Aussie could continue to rise as expectations of a strong economic rebound are lifting market sentiment.
As expected, the RBNZ kept interest rates on hold this week with the central bank recognising the recent run of stronger-than-expected economic data out of New Zealand. It looks like the RBNZ will now take a wait-and-see approach, given that economic indicators look good. All of this was no good for the AUD, which has fallen almost 1.5% since the announcement on Wednesday afternoon.
The AUD is still benefitting from the global relation theme and has reached a new three-year high against the USD this week. There has been a 5% move this year since the low in January, a move which some think is unsustainable. With no Australian economic data due for release over the next 24 hours, the AUD is likely to remain subdued coming into the weekend, but has its eyes set firmly on the 0.80 resistance level.
The AUD is still managing to cling onto its recent gains again the GBP, despite the news of the UK’s plan to end lockdown restrictions in June. Although the GBP is one of the strongest performing currencies this year, the AUD is being lifted by surging commodity prices. Looking toward to next week, the UK Government will deliver the Budget, in which the Chancellor of the Exchequer, Rishi Sunak, is expected to be announcing giveaways to accelerate the UK’s recovery post-lockdown.
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