After two days of significant losses, something that saw it threaten to break below 73 cents this time yesterday, the Australian dollar staged a recovery overnight, boosted by a surge in crude prices, strength in equity markets and a degree of profit-taking.
The AUD/USD eventually closed the session at .7362, up 0.66% from Monday’s closing level. In recent trade it’s continued to push higher, buoyed by strength in the New Zealand dollar following the release of the Reserve Bank of New Zealand’s (RBNZ) latest financial stability report early Wednesday.
In the report the RBNZ suggested that financial risks in New Zealand’s residential property market — particularly Auckland — had increased, leading some traders to trim expectations for further rate cuts from the bank in the period ahead.
The Kiwi currently sits up 0.53% at .6794. Although the RBNZ report has nil implications for monetary policy from the Reserve Bank of Australia, the Aussie has rallied in sympathy with its Kiwi counterpart.
It’s a strange, increasingly correlated world we live in, as demonstrated by the relationship between crude prices and the Aussie during times of little to no major economic data.
Currently the AUD/USD buys .7372, up 0.14% for the Wednesday session so far.
Looking ahead to the Asian trading session, there’s some local economic data released, although it’s unlikely to be overly influential on the Aussie.
At 10.30am AEST, Westpac will release its monthly consumer sentiment report for May — something that will likely garner more attention from a political standpoint rather than its implications for markets — while a hour later the ABS will released housing finance data for March with a decline of 1.5% expected.
Looking further ahead, the international calendar is devoid of major data releases, including in the US, meaning movements in crude and USD/JPY — often influential during quiet economic time — may be influential on movements in the Aussie dollar in the near-term.
Here’s the current scoreboard.
- AUD/USD 0.7372 , 0.001 , 0.14%
- AUD/JPY 80.61 , 0.18 , 0.22%
- AUD/CNH 4.8180 , 0.0061 , 0.13%
- AUD/EUR 0.6481 , 0.0009 , 0.14%
- AUD/GBP 0.5103 , 0.0007 , 0.14%
- AUD/NZD 1.0846 , -0.0045 , -0.41%