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Weekly roundup: AUD struggles as Victoria remains under lockdown

currency-newsWeekly roundup: AUD struggles as Victoria remains under lockdown
The Australian dollar has come under pressure over the last week after Victoria went into lockdown and the Reserve Bank of Australia (RBA) reiterated its commitment to loose monetary policy.
AUD exchange rates fell after a fast-spreading coronavirus cluster was discovered in Melbourne, which prompted Australia’s second most populous state to go into lockdown.
A brief recovery in market mood provided the risk-sensitive ‘Aussie’ with some support and tempered losses following US President Joe Biden’s announcement of a massive $6 trillion budget for 2022.
Meanwhile, the New Zealand dollar surged last week after the Reserve Bank of New Zealand (RBNZ) signalled that an interest rate increase could be possible in 2022, before retreating towards the end of the week as market sentiment turned cautious again.
AUD exchange rates have fluctuated so far this week after the RBA’s latest rate decision and GDP data release.
The RBA kept interest rates on hold but reiterated its ultra-accommodative monetary policy will remain in place until 2024, which caused the Australian dollar to dip.
However, the Australian dollar recovered some ground following a better-than-expected first quarter GDP growth print that came in at 1.8%, higher than the 1.5% forecast.
Looking ahead, the one-week extension to Victoria’s lockdown looks set to continue limiting AUD as rising coronavirus cases concern investors.
Australia’s latest trade data could provide the ‘Aussie’ some support, with the trade surplus forecast to widen and exports to have returned to positive territory in April.
Market sentiment could drive further volatility in the Australian dollar, as the influential US non farm payrolls could sour market mood if they indicate another dire reading in job creation in the US.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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