The Australian Dollar is back pushing 0.71c against the USD after dropping to a low of 0.6828, its lowest point in 2 years.
Recent risk aversion has seen the AUD sell off, however the past week has seen a recovery of sorts, and now we are back above 0.70c and that important barrier for business.
The GBP (British Pound) has seen a short sell off today also, with poor economic figures in the way of PMI Data pointing towards a potential recession the GBP. The flash estimate of May’s headline Services PMI fell to 51.8, well below the expected drop to 56.9 from 58.9 in April. A reading below 50 suggests negative growth.
The UK, like many countries are going through a tough time with the UK experiencing its worst cost-of-living crisis in decades, while the Labour/Job market remains tight for the start of 2022.
The GBP/AUD is still relatively strong overall sitting at around $1.77 after falling as low as $1.72 in April. however still a long way from it's short term top of $1.92 in February 2022.
The AUD/EUR has started to see a sell off today on the back of a strong IFO business climate index from Germany this morning and a comment from ECB President Lagarde saying that the ECB is likely to exit negative rates by end of Q3, 2022. This comment from Lagarde was not surprising amid the rising inflation in Europe, and the market is definitely aligned with this view, as the probability of rate hikes of 25bps at the next ECB meetings in July and September is reaching top levels, which should in turn become very positive for the EUR.
The AUD/EUR exchange rate still sits fairly high at 0.66c as we have seen it sit below 0.65c since 2017, so it's not the worst news, however with the EUR on the up, and the AUD dropping from the 0.68-0.69 range in April and May this year, this a bit of a concern.