Currency Update, May 20th, 2021

Updated: Jan 23

AUD to USD

The AUD/USD has traded within a tight 1c range of 0.77-0.78c in the past 3 weeks, with it see-sawing back and forth on a daily basis with no real movement one way or another. Reports from several of the world's largest banks suggest a continued tight range in the coming weeks, with a potential to sit within this under 0.78c in the coming 1-3 weeks. Overall the feeling is that there is some catalyst behind a move in the AUD to come, due to the surge in Iron Ore prices, which is seeing a boom in construction and growth in China, Australia should see some benefits of this, as long was the political picture doesn't provide a poor outlook. "Consumer Confidence, the employment data and retail sales were all stronger than expected, which will help sustain a positive outlook and provide support for AUD" the top economists at MUFG Bank, Japan's largest bank. As the continued price of shipping goes up, a stronger AUD/USD would help in this regard and there is still some positive outlook towards climbing back a little higher in the coming weeks, months. The chart below is showing a base around 0.7700, ideally we want to see it stay above this to allow it to push higher.

Dollar Chart

A set back last week was a 1.5% move in favour of the USD after stronger than expected CPI (inflation figures) the initial move was strong, however after the market had time to digest this, it's started to see a slight sell off in recent days, as people understand that the inflation figures showing that the cost of living in the USA has increased in the year since COVID began. Today's key news sees Australia's unemployment results released. The unemployment rate is expected to remain unchanged at 5.6%, so any move either side of this could see some further movement in the AUD/USD currency rates.


GBP to AUD

The GBP finally made its move off the key $1.80 mark, seeing rates push as high as 1.8301 in recent days. Stronger than expected domestic figures, along with a continued recovery from COVID in recent weeks has allowed the GBP push higher, and is approaching a 12 month high of $1.84. Something to keep an eye on that these key levels.

Dollar Chart



GBP to USD

The GBP to USD rates have climbed to a 2 year high, reaching a rate of 1.4220 this week, and moving up approx 4% in the past 4-6 weeks. As mentioned before, with both stronger economic figures form the UK, along with a general weakness in the USD, this has propelled the GBP/USD rates to highs only sees briefly since 2016 Brexit. Overnight the Federal Reserve released the minutes form their last meeting in which talk over continued economic recovery could start to put a slow on their bond purchasing program which sits at $120B a month. They will wait to see how the employment and inflation figures play out, however a turn around here could also see some strength back into the USD in the coming months after plenty of weakness in the past few months.

Dollar Chart

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