The Australian Dollar has moved sideways now for a few days at the 0.7250-0.7300 mark. Late August seen a move from 0.71c up the recent highs at 0.7474 before a run of down days seen the AUD/USD retract back towards 0.7225 by mid September. Retail sales figures from Australia yesterday did see a big turnaround from -2.7% last month to up 1.7% this month upswing today of around 0.6% before falling backwards and closing the day down. With the DXY (US Dollar against major currencies) in a strong up trend at the moment, the fear is that the AUD/USD falls back to retest the recent lows of 0.7120 in the short term. We hope to see a lift in COVID restrictions around VIC and NSW in coming weeks, which may see some boost in the local economy, however any resets and continued uncertainty will not help the AUD. EUR/USD
The EUR USD has dropped to its lowest point since November 2020 reaching a low of 1.1674 on Tuesday. Rabobank stated “There is little expectation that the ECB will steer away from its dovish policy bias in the coming months. While Germany’s election hasn’t been a prime market moving factor, the uncertainty connected with the end of the Merkel era is not a positive factor for the EUR.” With more economies now looking at recovery plans from the pandemic, more and more we can see the impact of covid on currency rates and some not have the bounce back they have once had due to ever changing circumstances. The key data for the rest of the week includes speeches from both the US Federal Reserve, and then the European Central bank President, comments around the future state of both economies, along with plans to rebuild during and after Covid will be key to see how the market reacts to these events, and see prices swing in one direction.