Your Weekly Market Update Has Arrived! — 6th September
The AUD has been on a storming run the past week, gaining almost 3% against its counterparts. The run, mainly fuelled by a risk-on market, has seen the AUD recover from multi-month lows against the GBP, EUR and USD. Despite falling iron ore prices and lockdowns across NSW and VIC, the AUD has been the currency of choice for traders, however, Rabobank is forecasting a move back to 0.70 by the end of the year. Tuesday sees the release of the Reserve Bank of Australia’s interest rate announcement and press release, it’s thought that policy will remain dovish until a clear exit date from the state-wide lockdown is defined.
AUD/NZD
The AUD continues to trade lower against the Kiwi on disappointing economic data, despite positive news about lockdowns ending when vaccination rates hit 70–80%, Australia’s Medical Association have warned that the country’s hospitals were not ready to tackle the government reopening plans. Analysts still have their sights on the central bank divergence with the RBA release on Tuesday expected to cement the difference between Australia’s dovish and New Zealand’s bullish plans.
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AUD/USD
Poor US employment figures on Friday sent the USD down across the board, it’s thought that the AUD will make further ground this week providing the RBA’s meeting goes smoothly. The disappointing report on Friday showed that the US had added a measly 235k new jobs in the month vs the 750k expected which means the Fed will likely put tapering in the freezer for now. The AUD has benefited from the news of an extra 4m vaccines secured thanks to a swap with the UK, the first doses have arrived in the country this morning.
AUD/GBP
The AUD has continued its move against the GBP with the latter being held down by supply chain disruption and material shortages which have hit the CIPS manufacturing PMI with another monthly fall to a fresh 5-month low. With both central banks speaking this week, the RBA on Tuesday and the BOE on Wednesday, it could be another choppy week as a lack of data means the market will be sentiment driven. Friday sees the release of UK GDP figures, a poor result here will put the GBP under further selling pressure.
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