The Australian Dollar fell away from its six-week high against the US Dollar on Friday after strong payroll figures closing the week at 0.7206 after touching a high of 0.7282 on Friday.
Better than expected Australian inflation figures, and the easing of the lockdown in Shanghai had fuelled talks of a 40 basis point rise in the RBA interest rate week that seen the AUD/USD climb approx 1.6% this week to reach the previous highs seen in April, before Friday's set back.
Overall the AUD has sen some real strength across the board in the past 1-2 weeks off the back of these developments between China and Australia as the AUD had risen from a low on May 12th of 0.6828 to see it sit comfortably above the 0.70c mark again.
The US economy and the Federal Reserve however also have a few important months ahead, with talks of a rate increase in June, July & August, the US Interest rates could be back at pre-covid levels if they do indeed increase the rates by 50 basis points at each meeting. The Fed are hoping to cool inflation in the states and after last nights jobs figures, the employment numbers in the US are only 800K jobs off pre pandemic levels, over 20 millions jobs were lost in 2020 and they have been clawed back month on month during the recovery.
So while there was "good news" overnight, it could spell bad news for the economy if rates keep increasing to cut spending, the effect on the economy could be bad and both JP Morgan CEO Jamie Dimon and Tesla's main man Elon Musk commenting on their concern for the short term future of the economy overnight the weekend with Dimon using the word "Hurricane" which does cause concern.
Moving into next week and a huge week of data is due for release encompassing China, Australia, New Zealand, USA and the Eurozone. All of the high tier announcements are due for releases, Interest rate decision in Australia and the Eurozone, manufacturing data from China, Trade Balance and Inflation figures from the USA.
A massive week of high tier announcements means room for lots of volatility.
As always, we are available for a chat should you have some upcoming exposure to the markets this week or in the coming weeks or months.
The current prices show the following:
AUD/USD - 6-week high - 0.7206
AUD/CNY - 6-week high, however just off a 12 month top - 4.799
AUD/GBP - 6 week high, however closing in on a 12 month top - 0.5767
AUD/EUR - 4 week high - 0.6723
AUD/NZD - Approaching the highest point since 2018, 1.1073
EUR/USD - 5 week high - $1.0718
Feel free to reach out and see if there is anything that we can do to minimise risk and take advantage of positive moves in the markets.