Aussie continues rise on global recovery hopes

Daily Currency Update

The Australian dollar jumped to multi week highs on Wednesday as risk appetite continued to improve. AUD/USD continued its weekly ascent to touch highs of 0.6616 on investors hopes that the global economy may be starting to show signs of recovery. The strong moves represent the first time the pair has traded above 0.6570 since early March.
As we have been saying for months, the Australian dollar has continued to trade in line with global risk sentiment and by association has been highly correlated with global equities. This saw traders ignoring Wednesday’s record fall in monthly retail sales with the AUD benefiting from a subdued greenback and a solid pickup in the S&P500. A continuation of heightening risk appetite will continue to weigh on safe haven currencies such as the USD and JPY and should underpin demand for risk currencies such as AUD and NZD.
Looking ahead to todays session, we will hear from RBA governor Lowe and Deputy governor Debelle during Australian trade before a raft of secondary data due out of the USA. Heading into the session we see downside supports for AUD/USD around the 0.6500 level before the may 15 low of 0.6400. On the topside, sustained trading above key psychological resistance of 0.6600 is needed to open up moves to March 9 highs of 0.6665.