Aussie dollar climbs above the uncertainty
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Why is the Aussie dollar climbing above 66 US cents now?
A strong Aussie dollar last week, it's back on the up, but for how long? And the Fed this week a cut is expected. The outside chance of a fifty basis point cut, but it's what's said that counts. But it's not just the Fed. There's the Bank of England, the Bank of Canada, and the Bank of Japan. Come on, guys, can't you coordinate your calendars a little better? Rather than only one week. It's Mondays the fifteenth of September, twenty twenty five. It's the morning call from Nabb. Good morning. Well, bond yields were generally up last week. Australia was the exception, though. Ten year yields were down more than ten basis points over the week compared to a five basis point rise in German bond yields. But there was a one big basis point drop in ten year treasuries, but that was after a four and a half basis point rise on Friday, more significant.
Was the eight basis point drop in 30 year yields in the US compared to a five basis point rise in five years over the week? And Friday wasn't a good day for US equities. The Dow was down 0.6%. The SP was also in the red. The Russell 2000 was down 1%. But okay for tech, of course. Of course. I mean the Nasdaq was up 0.4% over the day, 2% up over the week. The best performer over the week, though, was the NICE, up 4.1%, whilst the ASX200. Had finished the week in the red, even after a 0.7% lift on Friday. And oil had a good week. It was up 2.3% for Brent over the week, 1.3% for WTI.
How did Australian bond yields differ from global trends last week?
A bit of that came from Friday, but the win locally was the strength of the Aussie dollar. It gained 1.4% over the week, followed closely by the New Zealand dollar. And of the majors beaten by it, well, only the Norwegian krona. The US dollar was actually down 0.2%. Across the week last week. So let's celebrate that. First of all, the start of a week with Nabs Ray Atrill. So the Aussie dollar almost at 66.5 US cents. It did get to 66.7 on Friday, which is the best for the year to date. And you know, and on that, I mean, with one or two exceptions, I mean, it's been a pretty steady climb. I mean, it did stall a bit after April because of the tariff talk, presumably. Uh, but it's been on the rise. Now it's rising more.
more than anyone. And of course bond yields down at the end of the week as well, whereas most are most are rising. So Australia is taking a different path last week, it seems.
Yeah, good morning, Phil. That uh certainly given the the the outperformance of the bond market from an interest rate differential point of view, that should be pointing down, not up for the Aussie. But uh there's clearly a lot of other things going up. And uh yeah, this does seem like this move up is is for real and that we've finally broken clear of that sort of broad sixty four to sixty six range that we've been using to characterize the Aussie against the US dollar pretty much since sort of mid April when we bounce back from that initial Liberation Day crunch down towards sixty cents. And, you know, trying to make sense of it, uh, to some extent, I think, you know, the market is sort of rediscovering its enthusiasm to sell the US dollar as we head towards, you know, the inevitable resumption, I think, of the uh of the Fed's easing cycle.
Um so obviously there's there's a dollar side there. But I also think it's a a question of markets saying, well, yeah Yeah, we're happy to sell the dollar, but there's a lot of issues with other currencies just at the moment. Think about the euro and and sterling with their particular sort of fiscal travails, particularly in France.
What did the US equity markets do as the Aussie dollar rose?
You know, the Bank of Canada, uh, the economy looks weak, looks like they're going to cut interest rates again. Um, you know, Aussie sort of is a bit of a standout in that respect. But at the same time, you've got, you know, iron ore prices have have held on to this move, you know, comfortably above a hundred dollars. We traded above All last week. The gold price um you know continues to be strong, which historically is a a positive force for the currency. And let's not forget that you know the Chinese renumbi um has been on a little bit of a tear uh since we broke below seven fifteen and Asian Asian emerging market currencies in general had a pretty good week.
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Chapters
8 chapters
1
Why is the Aussie dollar climbing above 66 US cents now?
0:01–1:17
2
How did Australian bond yields differ from global trends last week?
1:17–3:06
3
What did the US equity markets do as the Aussie dollar rose?
3:06–4:41
4
What insights does Ray Attrill provide on the Aussie dollar’s breakout?
4:41–7:06
5
Are short squeezes driving the Aussie dollar higher?
7:06–9:33
6
What did the Michigan Consumer Sentiment Survey reveal about US inflation expectations?
9:33–11:15
7
How is China’s money‑supply and credit growth affecting global currencies?
11:15–12:58
8
What are the expected actions of the Fed, BoE, BoC and BoJ this week?
12:58–14:54