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US dollar rides the Fed's wave.Trading volumes are still quite low, but likely to pick up in coming weeks.James Swerling from Ebury says the US dollar has been moving with the Fed; initially up on the hopes that they were almost done hiking rates, and now cooling off on jobs data.
What China’s reopening means for currency markets.China is set to open its international borders next week ahead of Chinese New Year so we explain what that means for the currency market.Once infection rates become clearer he said we could see a positive story associated with the Aussie Dollar.
Will a black swan rock currency markets this year?The 2023 outlookTypical trading patterns for January this year will either hold up or be skewed by potential geopolitical volatility.
The Aussie improved modestly through the week, largely driven by weaker than expected US labour market data rather than domestic developments.
The Aussie dollar had a volatile week, falling below 70 US cents as USIran tensions escalated before recovering to close the week modestly higher at 70.4 US cents as prospects of a peace deal being signed as soon as this weekend lifted risk sentiment. The net move on the week was modest, but the intra-week swings were sharp, reflecting the fluid geopolitical backdrop described above
The Aussie retreated against the US dollar last week, as the greenback caught a renewed bid. Stalled US-Iran talks, the Trump-Xi meeting, the Federal Budget, and stronger-than-expected US inflation (both CPI and PPI) data were the key drivers behind last weeks movements.
Australian labour force data for March was broadly in line with expectations, with the unemployment rate remaining at 4.3%.
AUD finished last week up 2.5%, hitting near one-month highs around 0.707 against USD as risk appetite swung wildly. Markets initially reacted positively to a conditional two-week US-Iran ceasefire, but optimism quickly soured as Iran restricted Strait of Hormuz traffic and enforced illegal tolls. Fresh drone strikes on Saudi infrastructure further signalled that energy disruptions are far from over. Late-week sentiment found brief support on reports of direct Israel-Lebanon peace talks in Washington, though the outlook remains volatile as Israel ruled out a formal ceasefire and Hezbollah rejected negotiations without a truce.
