AUD - Australian Dollar

The Australian dollar broke resistance overnight, extending through 0.7330 to mark fresh highs at 0.7367. Risk sentiment surged after President Trump acknowledged that the transition to a Biden Presidency should begin. While Trump stopped short of conceding and assured supporters the campaign would continue to challenge the election result the commitment to a peaceful transition of power at least removed another risk barrier. Further support came following reports Former Fed Chair Janet Yellen will be named Biden’s Treasury Secretary. Yellen, has publicly called for increased government stimulus to support the economy through the pandemic and her appointment brings with it, an expectation for a larger spending plan.

Having struggled to break above 0.7340 the overnight rally and shift in risk narrative opens the door for the AUD to extend toward September highs at 0.74. With focus turning away from short term headwinds as optimism for a vaccine led recovery in 2021 increases there is ample scope for the AUD to capitalise on further USD weakness into the end of the year.

Key Movers

The US dollar, Japanese Yen and Swiss franc all shifted lower overnight as risk sentiment surged and the narrative shifted away from short term headwinds after President Trump acknowledged the head of the General Services Administration should begin the transition to a Biden led government. While the President assured supporters they will continue to challenge the election result the removal of the threat of a hostile transition of power eliminates another risk barrier weighing on currency markets. The dollar index fell three tenths of a percent and closed in on Monday’s three-month low at 92.013. With key technical supports at 92 still intact another surge in risk sentiment and a break below this threshold could open the door to further declines and an extension in the downward shift.

With the Euro and GBP enjoying gains on the back of broader USD weakness attentions remain affixed to the ongoing risk narrative. With Brexit negotiations expected to yield at least a partial trade agreement as early as Friday another risk barrier could well be removed in the coming days opening the door for another assault on 1.20 for the Euro and a break above 1.34/35 for Sterling.

Expected Ranges

AUD/USD: 0.7270 - 0.7410 ▲

AUD/EUR: 0.6120 - 0.6220 ▲

GBP/AUD: 1.8020 - 1.8380 ▼

AUD/NZD: 1.0480 - 1.0620 ▲

AUD/CAD: 0.9480 - 0.9630 ▲

IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.

Regulated in Australia by ASIC (AFS Licence number 226 484)
© 2010 Copyright Oz Forex Foreign Exchange Pty Ltd ABN 65 092-375-703
OzForex Foreign Exchange Services

Member of FOS (Financial Ombudsman Service)
Full Member of AFMA (Australian Financial Markets Association)

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

GBP/USD retreats from new highs amid dollar strength

GBP/USD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK's vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden's first moves as President. 

GBP/USD News

EUR/USD falls toward 1.21 ahead of Biden´s inauguration

EUR/USD has been descending toward 1.21. President-elect Biden is inaugurated later in the day and hopes of stimulus are high after Treasury Secretary nominee Yellen's testimony. 

EUR/USD News

Gold: Bulls recapture 200-DMA ahead of Biden's inauguration

Gold prices are attempting to correct higher above 200-DMA. The metal cheers rising US inflation expectations amid hopes of a massive stimulus package under the incoming Biden administration. 

Gold news

Bank of Canada Rate Decision Preview: No change anticipated in interest rate

The Bank of Canada is widely expected to keep monetary policy and quantitative easing unchanged at its meeting on Wednesday in spite of new COVID-19 provincial lockdowns and a slowing economy.

Read more

US Dollar Index: Upside target remains at 91.00

DXY met buyers in the 90.30 region earlier on Wednesday and now resumes the upside to the 90.50/55 band.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures