The euro slumped on Thursday following the European Central Bank’s (ECB) latest interest rate decision.
The looming rate decision, due on Tuesday, will be the major event for the Australian dollar this week, with the 2.1% rise in the TD securities inflation reading on Monday boding well for an increasingly optimistic Reserve Bank of Australia (RBA).
The Australian dollar meandered around $0.7570 against the US dollar last week, and around £0.5670 against the pound.
There wasn’t a great deal going on with regards to data, though the ‘Aussie’ Dollar did benefit from the ensuing rise in risk appetite as Italy achieved coalition leadership.
Surprisingly, the ‘Aussie’ also maintained solid form despite the extremely positive US labour market results released on Friday, perhaps supported by the weaker-than-expected US GDP result earlier in the week.
Looking ahead, investors are currently focused on the RBA’s looming rate decision and this week’s raft of Australian data.
On Monday, investors were pleased to see that the TD securities inflation estimate for May printed higher at 2.1% - up from 2.0%.
It is, however, still rather unlikely that the RBA will raise interest rates on this occasion, with the central bank expected to be staunchly of the view that the current historic low of 1.5% for its cash rate is the right setting.
Any hawkish sentiment, however could send the Australian dollar even higher, as could the forecast 2.7% rise in Q1 GDP, due on Wednesday.
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)