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  • Writer's pictureChris Broadfoot

Currency Update June 12th, 2023

The Australian Dollar has been up 2.57% this past week against the US Dollar, 2.67% against the Euro, and 1.76% against the Canadian Dollar. Overall, the AUD is in the green zone and it is likely due to the RBA interest rate decision that came out this past week.


Coming up this week, the Federal Reserve is going to release its interest rate decision which is very likely going to impact all other currency pairs, including those with the Australian Dollar. While it is expected that the rate will remain unchanged at 5.25%, there is a chance it will still increase.


An important update to look forward to is Australia’s unemployment rate. This helps us determine the number of people unemployed in the region. There is yet to be a consensus as to what might be the rate now but it is expected to decrease from 3.7%.


Finally, the Bank of Japan is also going to release its interest rate decision which will help us determine the level of inflation in the economy. Japan has been great at ensuring that there are no hints given out as to whether the rate will remain unchanged at -0.1%.


AUD/CAD


The AUD/CAD chart is showing a consistent uptrend this past week, with numbers reaching as high as 0.898. There have been a few slip-ups where the Canadian Dollar gained the high ground, but the Aussie quickly recovered and ended the week in the green zone.


The Reserve Bank of Australia released its interest rate decision for the month, revealing an increase of 25 bps to 4.1%. This comes as a shock since analysts were expecting the bank to keep the rate unchanged at 3.85%, at least for the time being for cost control.


Similarly, the Bank of Canada also released its interest rate decision, revealing an increase of 25 bps to 4.75%. There seems to be a pattern this past week where central banks have increased their interest rates despite showing no warning signs of doing so.


EUR/AUD


The EUR/AUD currency pair has shown a strong downtrend this past week where it started the week off at 1.646 and ended the week at 1.593. This comes as a surprise considering this has been a very positive economic data week for the Australian Dollar.

Australia’s GDP data came out this past week and the numbers turned out worse than expected. We are looking at a GDP of 0.2% compared to 0.6% previously. While analysts did expect it to drop to 0.3%, it dropped quite more than expected.


Retail sales help us determine consumer’s appetite for spending and it was recently revealed that the EU’s retail sales data turned out much better than expected. Retail sales were previously at -3.3% and they are now at -2.6%.

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