The Australian Dollar to US Dollar (AUD/USD) exchange rate strengthened by around 0.53% on Thursday afternoon.
Although the US Dollar enjoyed a healthy surge in the initial aftermath of minutes from the latest Federal Open Market Committee meeting, which indicated that the policymakers were happy with the current economic progress, US labour market data initiated a Dollar downtrend. The Australian Dollar, meanwhile, advanced against many of its major peers after market sentiment improved amid rising oil prices.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8123.
As explained above, the Australian Dollar strengthened after risk appetite improved thanks to rising oil prices. The change from risk-aversion strategies supported demand for the high-yielding qualities of the ‘Aussie’ (AUD).
‘Because of their long lead times, once cancelled or postponed, oil sands and deep-water projects cannot be brought online at short notice in response to rising prices,’ Chief Executive Officer Andrew Hall said in a Jan. 2 communiqué to investors in his Astenbeck Capital Management commodity funds. ‘This sets up the potential — if not the inevitability — for supply shortfalls in the future.’
The ‘Aussie’ also found support from positive domestic data results as Building Approvals and Foreign Reserves improved upon previous figures.
The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low today of 0.8072.
After having enjoyed a sustained bullish run, the US Dollar softened against some of its major rivals. Continuing Claims showed an unwanted increase from 2,351,000 to 2,500,000. Initial Jobless Claims dropped fractionally from the previous figure of 298,000, but the actual result of 294,000 was greater than the forecast figure of 290,000.
The disappointing labour data will ease pressure on the Federal Reserve to normalise monetary policy in the near-future.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Trend Lower
With a lack of domestic data to curb the trend, the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to continue trending lower. With that being said, however, the Australian Performance of Construction Index, due for publication later on Thursday evening, has the potential to provoke volatility.
The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high today of 0.8127.
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