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  • Writer's pictureChris Broadfoot

"Key Trends in the Currency Market" Week of March 4th, 2023.

The Australian Dollar suffered a substantial setback in the previous week, plummeting by 0.55% against the US Dollar and 0.73% against the Euro. Additionally, it experienced declines of 0.80% against the Japanese Yen and 0.28% against the British Pound. Undoubtedly, it was a challenging week for the Australian currency.

Commencing early Monday, Australia is poised to unveil its current account figures, shedding light on the disparity between exported and imported goods' values. Historically, the balance stood at -0.2B, with expectations now hovering around 5.0B for the upcoming release.

In parallel, the European Central Bank is scheduled to disclose its interest rate decision next week, potentially inducing significant volatility across EUR markets. Previously resting at 4.50%, the interest rate is anticipated to remain unchanged at this level.

Subsequently, the United States will unveil its initial jobless claims report, offering insights into the number of individuals seeking unemployment benefits in the past week. With preceding figures at 215K, forecasts suggest a dip to 212K, a development that could bolster the US Dollar's standing.

AUD/USD - Closed at 0.6526

Examining the AUD/USD pair's performance, it embarked on the week at its pinnacle of 0.656 before gradually descending to 0.649 mid-week, only to commence a modest ascent thereafter, concluding the week at a stable 0.652.

The US recently divulged its fourth-quarter GDP report for 2023, revealing a significant downturn from the preceding quarter. While Q3 boasted a GDP of 4.9%, Q4 witnessed a decline to 3.3%, falling slightly below expectations at 3.2%.

Furthermore, Australia released its January retail sales data, elucidating inflation-adjusted sales for the month. Despite initial projections of a 1.6% increase from a previous -2.1%, the actual rise only amounted to 1.1%, undershooting expectations.

Despite lacklustre economic performances from both Australia and the United States, the US Dollar managed to outshine the Australian Dollar by 0.55%, entering positive territory.

EUR/AUD - Closed at 1.6608

Turning to the EUR/AUD pair, it commenced the week at 1.647 before gradually ascending to 1.669 mid-week, encountering intermittent fluctuations before settling at 1.660 by week's end.

On Friday, the Eurozone unveiled its Consumer Price Index (CPI) data, reflecting the year-over-year change in goods and services prices. Despite forecasts of a decline from 2.8% to 2.5%, the actual drop amounted to 2.6%, signalling stability.

Moreover, the Eurozone's unemployment rate for January was disclosed, reflecting the number of unemployed individuals within the EU during the month. With previous figures at 6.5%, expectations of a rise to 6.4% were met, aligning with forecasts.

Overall, the Euro witnessed favourable economic indicators throughout the week, resulting in a 0.73% gain against the Australian Dollar, relegating the AUD to a disadvantageous position after a prolonged period.

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