The Australian Dollar to US Dollar (AUD/USD) exchange rate softened by around -0.36% on Friday afternoon.
Despite the recent shock move by the Swiss National Bank to remove their Euro cap causing significantly dampened market sentiment, the Australian Dollar strengthened against many of its major peers. This is as a result increased demand for gold thanks to its safe-haven qualities.
The US Dollar, meanwhile, also gained from its safe-haven status. However, declination in inflation eases pressure on the Federal Reserve to tighten monetary policy.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8193.
With market sentiment significantly dampened amid declination in oil prices and the SNB’s move to scrap the Euro cap, the Australian Dollar would ordinarily soften versus its major peers. However, the safe-haven status of gold has seen increased demand which has supported an ‘Aussie’ uptrend.
‘There’s a lot more uncertainty in Europe and the US, and that’s piqued a lot of investors’ interest in gold,’ Fain Shaffer, president at Infinity Trading Corp. in Indianapolis, said in a telephone interview. ‘Rising open interest is bullish for gold and means that traders feel gold is going to move higher over the short term.’
The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low today of 0.8166.
Although the Dollar softened after a recent succession of disappointing data results was seen to ease pressure on the Fed, the heightened demand for safe-haven assets bolstered Dollar gains.
A better-than-expected result from the University of Michigan Confidence data has also supported the US Dollar. Confidence eclipsed the median market forecast of a rise from 93.6 to 94.1, with the actual result reaching 98.2.
Given that safe-haven demand is supporting both assets, and with an absence of influential data to curb the trend, the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to hold steady for the remainder of Friday.
The Australian Dollar to US Dollar (AUD/USD) exchange rate reached a high today of 0.8256.
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