Australian Dollar Forecast: Iron Ore Prices Counterbalancing Dovish RBA 2021-02-13 00:00:00 Daniel Moss, Analyst
Australian Dollar Fundamental Forecast: Mixed
Surging iron ore prices have counterbalanced the RBA’s decision to extend its bond purchasing program.
Better-than-expected employment and retail sales figures may open the door for AUD to continue gaining ground.
Resilient Iron Ore Prices to Underpin AUD
The recent surge in iron ore prices has buoyed the commodity-sensitive Australian Dollar over the last two weeks, despite the Reserve Bank of Australia extending its bond-buying program to keep a lid on the local currency at its February 2 meeting. The RBA “decided to purchase an additional $100 billion of bonds issued by the Australia Government and states and territories when the current bond purchase program is completed in mid-April”, adding that “these additional purchases will be at the
The growth-linked Australian Dollar lost some ground despite a rising S&P 500 as the US Dollar received a boost from rising Treasury yields. This dynamic remains important to watch ahead.
Australian Dollar Outlook: Tied to Biden Stimulus Bets, S&P 500, US Dollar, Treasuries
2021-01-16 00:00:00
Daniel Dubrovsky,
Strategist
Australian Dollar Fundamental Forecast: Neutral
Australian Dollar strength may cool ahead on stimulus uncertainty
Rising Treasury yields putting on breaks for US Dollar weakness
Key event risk to watch: Chinese 4Q GDP, Australian jobs report
The growth-linked Australian Dollar spent most of this past week trading in limbo, a marked shift in pace from persistent gains since late October. Aussie crosses like AUD/USD, AUD/JPY, AUD/CAD and AUD/CHF tend to move very closely with broader risk appetite. This dynamic has been underpinned since central banks dramatically eased policy last year to support a global economy ravaged by the coronavirus.
Australia’s success in suppressing the novel coronavirus and soaring commodity prices may continue to underpin the cyclically-sensitive AUD in the coming months.