Aussie Ran Away to Upside, Doesn’t Want to Come Back

Analysts expected a correction of the Australian dollar after the impressive rally a week ago. Instead, the Aussie was climbing to new records against the US dollar almost every day.

The reason for the strength of the Australian currency is the continuing global recovery. The macroeconomic data across the world, including the rising non-farm payrolls in the US and the increasing growing manufacturing in China, supported the growth story. The growth of the economy bolsters commodities and that’s good for the Aussie, as it’s a commodity currency. As a result, the Aussie gained versus the safe currencies, including the greenback and the yen.

That same economic growth made the Australian dollar weaker against other commodity currencies, including its Canadian and New Zealand counterparts. Even the euro was unexpectedly strong this week, making the Aussie end the week flat against the shared 17-nation European currency.

AUD/USD advanced from 1.0240 to 1.0385 and AUD/JPY climbed from 83.37 to 87.27 this week. EUR/AUD closed this week at 1.3700 near its opening rate of 1.3719. AUD/CAD fell from 1.0047 to 0.9999, following the advance to 1.0118, while AUD/NZD fell from 1.3617 to 1.3533 after it reached the weekly high of 1.3726.

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