AUD/USD At Decade Low
AUD/USD At Decade Low
Following a brief recovery from its dip at the end of last month as fears concerning the coronavirus alleviated somewhat, the Australian dollar has since reached a decade low in the wake of the NFP (Non-farm payroll) release on Friday.
The AUD fell to its lowest at 0.66690 against the USD, a figure not seen since March 2009, after a decline that began 4 days earlier leading up to NFP and concluded with its release. It has since consolidated slightly, floating at around the 0.66755 mark.
The NFP release last Friday, the first of the year, massively exceeded predictions as the number of jobs increased by 225,000, far outnumbering the predicted estimate of 160,000. This figure was unexpected even as the ADP release a few days earlier, which is usually seen as a precursor to how the NFP will do, showed similarly outstanding results.
This is a very strong showing for the US economy and investors have reacted as such, leading the US dollar to rise not only against the AUD, but the CAD and NZD as well amongst other currencies.
Anish Lal at BlackBull Markets had this to say on the AUD/USD:
“The Australian Dollar fell nearly 3% last week amid a significant NFP beat above analyst expectations, and prior to this, very strong Private Jobs growth for Jan 2020. Markets are weighing down on the Aussie, as it touches a decade low, with the lowest tick around the 0.6661-mark post NFP release. The chart on the left indicates price action on the day, showing a continuation of the bear trend following the news release, and on the right a monthly time frame indicating a consolidation area from 2009 sub 65 cent mark, where the price could well head, with this week’s China economic metrics in view. The RBA are set to hold onto rates, however economic impacts from these low rates could well be only felt in the years to come, meaning it could get worse before it gets better.”
Where one goes up, the other must come down. As discussed in last week’s article, gold hit unprecedented highs as investors flocked to the safe haven asset in droves. And now it seems US stocks have taken a plunge in response, as the Dow Jones dropped nearly 1000 points as it opened for the week, as part of a global stock selloff.
BlackBull Markets are excited to introduce a new video series: Monday Meetings. This will be a weekly series in which we discuss in depth the movements of various markets throughout the week, featuring our expert analysts Andre De Almeida, Philip van den Berg, and Anish Lal.
When we last looked at gold at the beginning of the month, it had hit a brief dip coinciding with the NFP release, but since then has come back with a vengeance, reaching further and further heights.
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