The Australian dollar experienced a significant drop as the weekend approached. Despite weaker-than-expected consumer sentiment data, the US Dollar finish the previous week on a solid note. On Friday, the Australian and New Zealand dollars faced downward pressure due to declining commodity prices and red-closing indexes. As a result, both currencies fell by over 1.50% against the US Dollar and traded near 0.6640 and 0.6190, respectively.
This comes after the AUD/USD tested the upper short-term range at 0.68c and failed dramatically, with two large-day declines in a row.
This week, the Australian dollar and the New Zealand dollar will experience a flurry of activity, starting with the release of the RBA minutes and Chinese economic data on Tuesday, followed by US retail sales. Later in the week, unemployment figures for Australia and the United States will be released on Thursday.
The Australian Dollar to Euro Dollar pair closed the previous week at 0.6121, after reaching highs of 0.6197 on Wednesday. This has been the rebound off the floor in recent weeks when this pair crossed the 0.59c mark for the first time since November 2020.
In contrast, the EUR/USD pair had its worst weekly decline since September 2022 due to the strengthening US Dollar. Despite hawkish comments from ECB policymakers, the EUR failed to gain any demand. On Friday, Joachim Nagel stated that the ECB's most recent rate hike would not be the last, as they need to ensure the current wave of inflation comes to an end.
Like its neighbour, the British Pound gained ground against the Australian Dollar, and the pair closed at 1.8742. With UK's consumer inflation at 10.1%, investors anticipate a more aggressive stance from the Bank of England moving forward. On Friday, GDP data showed that the UK economy expanded by 0.1% in the first quarter, avoiding a recession, which helped the Pound recover some of its lost ground.
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