The Australian Dollar to US Dollar (AUD/USD) exchange rate softened by around -0.11% on Monday afternoon.
With market sentiment dampened following the Swiss National Bank’s (SNB) highly controversial move to remove its Euro cap, the high-yielding Australian Dollar softened versus many of its major peers. Positive domestic data has had little impact on the ‘Aussie’ (AUD) with fluctuating oil prices adding to cooling risk-appetite.
The US Dollar, meanwhile, is generally holding steady against its most traded currency rivals due to a complete absence of domestic data to provoke changes. A slight appreciation can be attributed to demand for safe-haven assets.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8220.
The well documented move by the SNB to remove its Euro floor caused significant market volatility. With the majority of traders suffering heavy losses as a result of the surprise action, risk appetite has taken a significant hit. This, in turn, caused the risk-correlated ‘Aussie’ Dollar to soften against many of its major peers.
‘International risk appetite is falling as a result of the nature of Thursday’s announcement,’ writes Deutsche Bank economist George Saravelos in a note released on Friday. ‘The negative impact on risk appetite is one of the most important side effects of this decision. First, the policy move marks a meaningful negative in terms of policy credibility: up until a few days ago the SNB had the ‘utmost determination’ to defend a currency floor, which has now been fully reversed.’
The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low today of 0.8191.
Given the complete lack of domestic data to provoke changes, the US Dollar is generally holding steady versus most of its major rivals. A slight appreciation, however, can be attributed to the lack of trader risk appetite and demand for safe-haven assets.
The North American economic docket will be particularly sparse over the course of the week, so US Dollar movement will be subject to fluctuations in the wider currency market rather than by domestic developments.
With little by way of domestic data to curb the trend, the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to continue trending within a narrow range on Monday. With that being said, however, there is the possibility of volatility with the Australian weekly consumer confidence data due for publication late on Monday evening.
The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high today of 0.8244.
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