The Australian Dollar (AUD) has continued to fly and outperform a number of its peers in the FX market.
One of the leading reasons is that it has benefitted from rising hopes that the economy could begin to recover and start getting back to business. Australia has been one of the leading nations at containing the spread of the virus.
Earlier in the week, it was announced that some states in the country have already begun easing lockdown measures. It puts Australia ahead of other economies, getting somewhat of a head start, keeping AUD on the front foot, on economic rebound optimism.
Elsewhere, overnight Australia saw the release of its CPI (inflation) data, which came in higher than expected and the previous, another AUD positive.
Australian Q1 CPI came in at 0.3% Q/Q, higher than expectations for 0.2%, while the Y/Y rate of inflation came in at 2.2%, higher than expectations for 2.0% and the previous reading of 1.8%. This morning’s stronger than expected CPI reading puts inflation back within the RBA’s target range of 2-3% Y/Y.
How long can this run go?
As we noted in our last article, there was a bull flag structure of which has been breached to the upside, inviting that greater wave of buying pressure. It is something of which we pointed out to our members in good time. The buyers will be pressing for a return of the pre-March fall area above 0.6500, however, there are big data risks to be aware of which are; US GDP and FOMC.
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