With few domestic developments on the calendar over the past week, the Australian Dollar has been mostly moved by market sentiment.
This Week’s Australian Dollar Exchange Rates:
Pound Sterling to Australian Dollar (GBP/AUD) –
Week’s High: 1.7152
Week’s Low: 1.6881
US Dollar to Australian Dollar (USD/AUD) –
Week’s High: 1.3214
Week’s Low: 1.2998
Euro to Australian Dollar (EUR/AUD) –
Week’s High: 1.4776
Week’s Low: 1.4565
New Zealand Dollar to Australian Dollar (NZD/AUD)
Week’s High: 0.9665
Week’s Low: 0.9449
Market Focus on US Developments Keeps the Australian Dollar on the Move
The Australian Dollar spent the opening of last week climbing due to an upcoming US interest rate decision. Higher interest rates in the US would make the US Dollar more attractive, therefore weakening the appeal of the Australian Dollar. Because markets were not expecting the US Federal Reserve to raise interest rates, investors were confident in buying the Australian Dollar.
The past few days have been incredibly light in terms of Australian economic data, leaving market sentiment to dictate the Australian Dollar’s movement. The ‘Aussie’ managed to make some gains at the beginning of this week due to expectations surrounding the US presidential election debate.
Markets largely believe a Donald Trump presidency would be bad for the US, so global currency markets were sluggish on Monday as investors held their breath. When Hillary Clinton put in a strong performance, investors were confident enough that the markets would remain stable to buy the Australian Dollar again, driving it higher.
US Data and Fed Speculation to Dictate AUD Movement until Tuesday’s RBA Meeting
Australian data isn’t quite as sparse over the coming days, although the current market trend for keeping an eye on the US looks set to continue. Numerous officials from the Federal Reserve will be giving speeches over the coming days; should they suggest US interest rates are going to rise then the Australian Dollar is likely to fall. There is also high-impact US data due for release, which could alter how markets perceive the likelihood of an interest rate hike. This too will affect the ‘Aussie’.
The latest AiG Performance of Manufacturing Index will be of interest on Monday; it is currently showing that the manufacturing sector is contracting at a significant pace. If the decline worsens the Australian Dollar could lose some value.
Tuesday finally brings a high-impact development; the Reserve Bank of Australia (RBA) interest rate decision. Markets currently expect there to be no changes made to the 1.5% official cash rate, but with a new Governor in place, it will be interesting to see if subsequent commentary differs in tone from previously.