The Australian and New Zealand dollars continued to see substantial inflows due to geographical distance from the conflict and surging commodity prices. Coal and natural gas prices are at record highs whilst oil is at $115, 21% higher than this time last week. This level was exceeded only for a few weeks in 2008. Market volatility remains high and share markets jumpy.
American unemployment fell from 4.0% to 3.8%, the lowest level since April 2020. The number of jobs jumped by the most in seven months. However, wages growth stalled with this measure falling to an eleven month low. This is a worrying development for the Fed which is due to hike rates next week, due to the inflation rate sitting at a forty year high. In effect real wages growth is going backwards.
AUDUSD has made the deadlines as it sits on the brink of 0.7400 for the first time since November. The real movers have been Pound and Euro. AUDEUR has risen by to 5.1% since last Monday and is at the highest level since August 2017. AUDGBP is at a ten month high following a 3.7% weekly advance. Their proximity to the warzone is seen as a key risk to their economies.
THIS WEEK’S AGENDA: Pivotal US inflation data is out on Thursday night ahead of the Federal Reserve meeting next week. The European Central Bank meets on the same night and is likely to signal the need for monetary policy tightening in spite of the economic threats due to the conflict. The most notable Australian event will be the speech of RBA governor Lowe.
| CURRENCY | MID-RATES | %CHANGE |
|---|---|---|
| AUD/USD | 0.7372 | +0.66% |
| AUD/EUR | 0.6746 | +1.93% |
| AUD/GBP | 0.5572 | +1.57% |
| AUD/JPY | 84.76 | +0.22% |
| AUD/NZD | 1.0771 | -0.09% |
| AUD/CNH | 4.6601 | +0.61% |