AUD surges through 0.74 on heels of risk on rally

Daily Currency Update

AUD - Australian Dollar

The Australian dollar extended gains through trade on Thursday, punching through 0.74 US cents. Having again tracked sideways through the domestic session, bouncing between 0.7370 and 0.7390, the AUD surged toward intraday highs overnight. Buoyed by a solid risk on run, the AUD touched 0.7425, before leveling out into this morning’s open. There appears no real catalyst for the shift in risk demand as investors backed US stocks, snapping a four-day losing streak. The S&P 500 enjoyed its biggest single day appreciation in 7 months, dragging other risk assets including commodity currencies higher. The Aussie dollar has enjoyed renewed support this week on the back of stronger commodity prices, a fall in US yields and renewed optimism the re-opening of the domestic economy will foster a swift and rapid economic rebound. Having moved above its 100 day moving average, the door is open for the AUD to extend gains into the weekly close. A consolidated break above 0.7413 and a push above 0.7425 suggest there is sustained buying demand, while a correction and shift lower could see a dip back toward 0.7385. With little of note on today’s domestic ticket our attentions remain offshore. Reports the Peoples Bank of China will cut its RRR rate today could prompt price action through the domestic Australasian session, while US retail sales dominate the overnight docket.