What a day Friday was for the Australian dollar, and financial markets in general.
The Aussie traded in a near 3.5 cent range against the US dollar, the largest in absolute terms since November 30, 2011, the height of the European debt crisis.
At 1.97%, the loss was the largest in percentage terms since August 24, 2015. It could have been significantly larger, and more historic, having traded down to the low 73 cent region earlier in the session.
Against the British pound, the statistics were even more impressive, albeit in the other direction.
At 3.38%, the AUD/GBP gain was the largest in percentage terms since at least 1982, according to data provided by Thomson Reuters. It could well have been the largest increase on record, along with the largest intraday range.
It also saw the AUD/GBP close at .5451, the highest level since November 2014. The AUD/GBP chart below tells the story.
Clearly, it was a remarkable day; akin to anything seen during the global or European debt crises.
In the wake of that remarkable day, the Aussie has opened weaker against the US dollar in early Asian trade on Monday morning, currently fetching .7427, down around 0.4% from Friday’s closing level of .7458.
With nothing of note on the economic data radar today, Richard Grace, chief currency strategist at the Commonwealth Bank, expects volatile trade to persist in the days ahead.
“We anticipate currency volatility will remain elevated over the early part of this week,” says Grace.
“The implications of the UK’s decision to exit the EU further sink in. Adding to early Asian trading volatility is the news that exit polls are showing Spain’s two main leftist parties, the anti-establishment group Podemos and the 137-year-old Socialists, probably won a majority of seats in parliament in Sunday’s election.
“EUR/USD will remain under some downside pressure as Eurosceptic parties lift their voice.”
Given the heightened levels of uncertainty that continue to exist, markets will continue to be driven by sentiment towards the Brexit vote, along with headlines from senior policymakers around the globe.
Remarks from Bank of Japan officials, along with the Chinese yuan fix from the People’s Bank of China around 11.15am AEST, are also likely to be influential over the course of Monday trade in Asia.
Although the market movements are unlikely to be of the same scale seen on Friday, skittish movements are likely to persist, particularly as trading volumes remain below average levels.
Here’s the Aussie dollar scoreboard as at 8am AEST.
- AUD/USD 0.7427 , -0.0031 , -0.42%
- AUD/JPY 75.66 , -0.45 , -0.59%
- AUD/CNH 4.9323 , -0.0152 , -0.31%
- AUD/EUR 0.6724 , -0.0011 , -0.16%
- AUD/GBP 0.5526 , 0.0032 , 0.58%
- AUD/NZD 1.0477 , -0.0011 , -0.10%
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