- AUD/JPY recovered back to the 83.50 area on Wednesday as the Aussie benefitted disproportionately amid USD weakness.
- A surge in base and industrial metal, as well as energy prices, disproportionately benefitted the currency of export-dependent Australia.
AUD/JPY rallied 0.4% to close to the 83.50 mark on Wednesday as a sharp deterioration in the US dollar fortunes triggered outperformance in risk-sensitive currencies across the board. Though the yen also gained a solid 0.6% on the day versus the battered buck, it could not keep pace with the Aussie, which soured over 1.0% on the session versus the dollar, hence the move higher in AUD/JPY. The pair has now reversed more than 1.3% higher versus Monday’s sub-82.50 lows and has thus pared slightly more than half of the pullback from last week’s 84.30ish highs to Monday’s lows.
The dollar’s sharp post-US Consumer Price Inflation data decline, which occurred despite the report revealing headline inflation hitting its highest levels since 1982 at 7.0% YoY and prompted hawkish Fed member James Bullard to overtly call for four hikes in 2022 (the first Fed member to do so), spurred a rally in industrial metals. Copper was last up nearly 3.0% on the session, whilst the Bloomberg Industrial Metals Subindex, which tracks prices in copper, nickel, aluminium and zinc, was up closer to 1.5%. This, coupled with sharp upside in crude oil and US natural gas prices, benefitted the currencies of commodity and energy export-dependent countries like Australia.
Note that commodities (particularly the base metals) are also getting a boost after the latest inflation data out of China came in cooler than expected, which gives the PBoC and Chinese authorities to support growth this year. If dollar weakness and commodity price strength can continue like this for a few more sessions, AUD/JPY is in with a decent shout of recovering back to last week’s highs above the 84.00 mark. The big risk to this call would be if something happens that hurt risk appetite once again, just as happened last week when risk assets tumbled amid Fed tightening fears.
|Today last price||83.47|
|Today Daily Change||0.34|
|Today Daily Change %||0.41|
|Today daily open||83.13|
|Previous Daily High||83.22|
|Previous Daily Low||82.51|
|Previous Weekly High||84.3|
|Previous Weekly Low||82.64|
|Previous Monthly High||83.76|
|Previous Monthly Low||78.79|
|Daily Fibonacci 38.2%||82.95|
|Daily Fibonacci 61.8%||82.78|
|Daily Pivot Point S1||82.69|
|Daily Pivot Point S2||82.25|
|Daily Pivot Point S3||81.98|
|Daily Pivot Point R1||83.4|
|Daily Pivot Point R2||83.67|
|Daily Pivot Point R3||84.11|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.