Daily Currency Update
AUD - Australian DollarThe Australian dollar had an excellent run early last week touching highs of 0.7339 on the back of the euphoria surrounding the encouraging progress in the Pfizer vaccine. Unfortunately, the news was quickly dominated by fears the vaccine hopes may be premature and a rise in COVID-19 cases worldwide, with cases and deaths in Europe and US soaring. Opening on Friday at 0.7230, without any macroeconomic news for markets to focus on, the AUD/USD moved within a 20-pip range (0.7220 – 0.7240). As trading continued offshore, a rise in sentiment pushed the Aussie to highs of 0.7273 and finally closing the week at 0.7264. The AUD/USD opens this morning at 0.7264, and AUD is deemed to have moved into a consolidation phase. From here we are likely to see the pair move between 0.7130 and 0.7340 for the short-term. Looking ahead, the RBA Governor will deliver a speech titled ‘COVID, Our Changing Economy and Monetary Policy’ followed by RBA’s Monetary Policy Minutes on Tuesday. Later in the week all eyes are on Australia’s Employment figures and Retail sales.
Key Movers
The US Dollar Index, which measures the strength of the Greenback against a basket of six major currencies, slipped on Friday closing at 92.1, as the enthusiasm for a possible COVID-19 vaccine was overridden by the second wave of the virus in the US and Europe. Some US states have once again imposed limits on businesses and everyday life, while the UK, Germany and France are in national lockdowns. On the data front, the preliminary estimate of the US November Michigan Consumer Sentiment Index dropped to 77, below the estimate of 82. Consumers judged future economic prospects less favourably, while their assessments of current economic conditions remained largely unchanged. Over in Europe, the EUR/USD pair closed the day higher around 1.1834 and the GBP/USD cross put in a strong performance into the weekend close finishing just below the psychological 1.3200. News that UK PM Johnson’s adviser Cummings had resigned early pushed the sterling, which improves the chances that the EU and UK will be able to agree on a free trade deal to replace the current arrangement at the end of the year. However, the UK government released a statement saying that Cummings would continue working for the UK PM until mid-December.
Expected Ranges
- AUD/USD: 0.7170 - 0.7340 ▲
- AUD/EUR: 0.6080 - 0.6220 ▲
- GBP/AUD: 1.7980 - 1.8270 ▲
- AUD/NZD: 1.0540 - 1.0680 ▼
- AUD/CAD: 0.9460 - 0.9610 ▲