The Australian dollar has opened the new trading week above the US 78 cent level, recovering after falling to a fresh six-week low on Friday following a late rally in US stocks.
Here’s the scoreboard as at 7.50am AEDT.
AUD/USD 0.7808 , -0.0004 , -0.05%
AUD/JPY 84.96 , 0.11 , 0.13%
AUD/CNH 4.9292 , 0.0051 , 0.10%
AUD/EUR 0.6374 , 0.0011 , 0.17%
AUD/GBP 0.5653 , 0.0014 , 0.25%
AUD/NZD 1.0779 , 0.0011 , 0.10%
AUD/CAD 0.9822 , -0.0004 , -0.04%
As pointed out by Jason Wong, Senior Markets Strategist at Bank of New Zealand, the Aussie’s movements were largely in line with those in stocks and VIX.
“Equity market volatility continued on Friday with US stocks trading within a 4% range and ending on the positive side of the ledger while the VIX index traded a 28-41 range and closed the week at 29,” he said.
“The AUD ended the week on a positive note, highlighting that this isn’t an ordinary bout of risk appetite reduction we’re seeing.”
The late rush of buying on Wall Street helped to push the AUD/USD back above the .7800 level having fallen to as low as .7756 earlier in the session.
It continues to sit around those levels in early Asian trade.
With next to nothing on the economic calendar to dictate direction, the movements in the Aussie and other risk assets today will almost certainly influenced by investor sentiment seen during the session.
After plunging on Friday, there may be more focus than usual on the performance of Chinese stocks. Likewise, the movements in the Chinese yuan could also prove to be influential.
“The economic calendar is light over the next 24 hours, but that won’t necessarily prevent any further market volatility,” says Wong.
“In the coming week the key focus will be US CPI data on Wednesday.
“Another positive surprise of 0.3% for the month for the core measure could send bond yields higher and equity markets and the AUD lower.”