The Australian dollar continued to climb higher in overnight trade, supported by near-euphoric levels of buying across US and European stocks and another surge in crude oil.
Yes, with quarter-end almost upon us, the Brexit bashing that risk assets copped in the immediate aftermath of the UK referendum has been replaced by a Brexit buying bonanza.
As a well-known proxy for investor sentiment, the Aussie has benefited from the recovery in risk assets over the past two sessions, having not really fallen far in the first place.
Expectations for additional central bank support in the wake of Brexit are clearly having an impact.
At 7.50am AEST, the AUD/USD was buying .7444, up 0.77% from Tuesday’s closing level. From the lows of last Friday, it has now recovered by close to 2%.
Fitting with the familiar pattern seen earlier in the week, there is no major market-moving data scheduled for release on Thursday, ensuring that investor sentiment and quarter-end window dressing will likely dominate movements during the session.
Domestically, markets will receive private sector credit figures for May — a now customary 0.5% increase is forecast — while there is a raft of Japanese data released over the session, including industrial output.
None will be market moving.
With one day left in the 2016 financial year, the AUD/USD has fallen 2.1% year-to-date. Over the June quarter it has risen 2.2%.
It is up 9% from the lows of the year struck in mid-January.