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Currency Market Analysis

Jul 09, 2020 | Currency Market Analysis

Global Themes

Aussie drifts higher on commodity pricing


• Equities rally resumes
• Commodities drive AUD higher

Aussie drifts higher on commodity pricing

Growing Chinese demand has led to an increase in iron ore pricing thus driving the commodity price to its highest level yet in 2020. The Aussie dollar has lifted overnight on the back of that news. This was also supported by the strengthening of copper price, an indicator of global growth, with copper pricing close to the highs of January.

A late rally after a mid-session dip in US equity markets overnight, which was driven by tech stocks, has also helped Aussie dollar regain some of the footing lost after the Melbourne lockdown news. This has added to the rising commodity prices driving the AUDUSD rate up 0.76% overnight.

Elsewhere...

Yesterday’s there was a pullback by markets following PM Scott Morrison’s press conference. The AUD was down 0.8% at one point versus the US Dollar, however those dips have reversed now with the Aussie dollar only 1.1% from the year highs against the USD.

Aupport from UK Chancellor Rishi Sunak for the UK economy has seen GBP advance against the AUD, which is down 0.56% versus Sterling so far this month. In Canada rising commodity prices have helped buoy their currency also, however the Aussie dollar is still up 0.68% so far this month versus the Canadian Dollar.

Today...

On the agenda today is the Chinese inflation figures scheduled for 11:30am AEST. Tonight we are expecting the US unemployment claims numbers, which will give us some insight to how the recent rising infections is affecting Americans return to employment and the knock-on effect we expect to see in economic activity.


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