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Currency Update, April 17th, 2023


Last week, the Australian Dollar reached a seven-week high before plummeting. We saw a high on Thursday of 0.6781 after a 1.4% move in favour of the Aussie.


After positive CPI and PPI numbers in the US, the US Dollar came under more selling pressure before regaining strength into the weekend and closing last week back at 0.6707.


This has continued to keep the AUD/USD exchange rate in the 0.66-0.68 band since mid-Feb.


The RBA's March meeting minutes will be made public during the following week. It is unlikely that there will be any surprises in the notes given the bank's remarks since then.


The quarterly CPI, which will be released on Wednesday, April 26, will be the next significant domestic event for the Australian dollar. If that data comes in below expectations, the RBA will have some leeway to delay any further rate increases, but if price pressures pick back up, the RBA may decide to adopt a more hawkish stance once again.




GBP/AUD


The British Pound finished the week back around 1.85 against the AUD after a fall early in the week, this pair is still sitting at a 12-month high.


UK GDP showed a modest improvement year on year but the UK economy failed to grow in the month of March but at the same time avoided a contraction, coming in at 0%. The BoE’s Chief Economist Huw Pill mentioned that lending conditions were observed to have “slowed only slightly”, while the MPC remains confident that inflation will be lower in Q2 despite last month's failed attempt to bring inflation below double digits.


The GBP along with the EUR is still in favour with the markets so expectations are still to the upside.




AUD/CAD


Last week The Bank of Canada left rates unchanged at 4.50% as expected:


The AUD to CAD begins the week below 0.90c and has seen an over drop of approx 6% since January. We are now sitting at the lowest rates since November.

  • Guidance is largely unchanged: the BOC will continue to assess whether the policy is sufficiently restrictive and remains prepared to raise rates further if necessary, QT will continue without changes



As always, for any particular updates, or to have a chat about risk management and upcoming payments, then reach out to me when it is convenient.


Have a great week.

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