Two weeks of yo-yo action has seen the AUD/USD exchange rate bounce from 0.71c to 0.74c, then back to 0.71 and now back again to 0.74.
The constant risk on, risk off approach to the markets has the Australian bouncing all over the place. The on-going concerns in Ukraine and the reactions from the rest of the world are turning currencies on their heads on a daily basis.
In times like these, and as we don't have that crystal ball, it again can show how important a risk management plan can be, and allowing you to not be on the edge of your seat during times of real market uncertainty.
The Australian dollar has found support at 0.71c on a few occasions now, and with a risk off mood it's holding this level which is a positive that we would hopefully not see it back in the 60s anytime soon. With the supply/demand situation of commodities keeping the AUD high currently, the other side of this coin is that we can have some real supply issues locally and with the continued shipping issues and stock supply issues it's the local consumers and product based businesses that are really feeling the pressure.
Cost of living pressures are growing very quickly, between petrol, food and general expenses, the RBA and the government have a real job on their hands to make sense of the current situation and put a plan in place that can both help the people and businesses of Australia, without sending the AUD either too high for exporters, or too low for importers.
The AUD for now seems to have made a large run up, moving between 5-9% against the major currencies, so it may see some sideways movement for now before deciding on which way the market will take it again.
The market has moved significantly since February 1st, 2022 with the following positive moves in favour of the AUD.
AUD/USD - Up 6.12%
AUD/EUR - Up 8.64%
AUD/GBP - Up 8.08%
AUD/JPY - Up 9.65%
EUR/USD - Down -3.03%
GBP/USD - Down -4.02%
Something to keep in mind if pricing forward and planning the next 3-12 months and contact us if you would like to look at any options of securing an exchange rate while prices have moved in your favour.