Aussie consolidating gains at 5-week highs

Daily Currency Update

AUD - Australian Dollar

The Australian dollar advanced for a fifth day in a row on Friday, touching as high as 0.7440 before pulling back at the close to hit a 5-week high. Opening this morning at 0.7415, the Aussie has enjoyed a stellar run of late, rebounding from as low as 0.7170 in late September.

The Aussie found its feet last week on the back of upbeat equity market movements which in turn were spurred on by better-than-expected quarterly earnings and retail sales figures in the US. The positivity in global share markets spread to commodity currencies such as the Aussie which in turn led to a small sell-off in safe haven currencies such as the greenback and Japanese yen. Adding further support to the Aussie is reports that the Chinese central bank expects risk of contagion from the Evergrande Groups’ collapse is ‘“controllable”; easing market concerns about a chain reaction affecting the world's second-largest economy. Closer to home, the relaxation of COVID-19 restrictions in Sydney buoyed domestic markets and improved optimism that NSW may finally be able to move back into ‘normal’ proceedings.

Moving into a new week, the Aussie is set to initially take direction from China’s GDP reading and NZ’s CPI report before moving into RBA Policy minutes on Tuesday.