The Australian Dollar to US Dollar (AUD/USD) exchange rate is trending within a narrow range on Monday afternoon.
With market sentiment significantly dampened amid the unknown regarding Greece’s political situation, the safe-haven qualities of the US Dollar has seen the North American asset strengthen versus the majority of its major peers. Compounding the ‘Greenback’ surge is futures traders speculating that the Federal Reserve will lead the way towards monetary policy normalisation.
The Australian Dollar, meanwhile, avoided declination during dampened market sentiment as a result of rising gold prices.
The Australian Dollar to US Dollar exchange rate is currently trending in the region of 0.8096.
Although, in 2014, the commodities market registered the biggest annual declination since 2008, a slight recovery led by gold and natural gas has supported ‘Aussie’ (AUD) gains. Of particular significance to the Australian Dollar are gold prices, which are rising as a result of traders seeking safe-haven assets whilst the Greek political crisis dominates focus.
Victor Thianpiriya, commodity strategist at ANZ Bank, stated; ‘Gold has priced in a lot of the downside already. If you have a long-term investment horizon then I think gold represents a good buy at this time. Our core view for gold and the precious metals complex is that the potential for a recovery in prices through 2015 is much better than it was in 2014, despite the expected lift-off of the US Fed Funds rate.’
The Australian Dollar to US Dollar exchange rate has fallen to a low today of 0.8031.
Amidst the unknown regarding Greece’s future in the European Union, safe-haven demand soared which allowed the US Dollar to surge against most of its rivals. Compounding the upsurge is futures traders speculating that the Fed will raise interest rates in the near-future.
The US Dollar is seemingly advancing irrespectively of data or of dovish speeches made by Fed officials. Fed official John Williams stated; ‘June 2015 seems a reasonable starting point for thinking about liftoff.’ In recent comments, the policymaker has put the likely timing of rate hikes in the latter half of 2015.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Fluctuate
With Australian weekly consumer confidence data due for publication later on Monday evening, there is the potential for AUD/USD volatility. Tuesday’s Chinese Services and Composite PMIs have the potential to spark ‘Aussie’ volatility.
The Australian Dollar to US Dollar exchange rate climbed to a high today of 0.8107.
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