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Australian Dollar Recovers from Daily Lows, Domestic Data Supports

June 10, 2020 at 11:08 by Vladimir Vyun

Reverend John Flynn on Australian 20-dollar billThe Australian dollar was weak intraday on Wednesday but has currently recovered and is one of the strongest currencies on the Forex market for the day, rising against most of its major rivals and trading about flat against the rest of them. Domestic macroeconomic data was supportive of the currency while reports in China, Australia’s biggest trading partner, were negative.

The Westpac-Melbourne Institute Index of Consumer Sentiment climbed by 16.4% to 88.1 in May from the extremely low level of 75.6 registered in April. The report commented on the result:

Remarkably, consumer confidence is now back around pre-COVID levels, having recovered all of the extreme 20% drop seen when the pandemic exploded in March–April.

It added further, explaining the positive reading:

Confidence has clearly been buoyed by Australia’s continued success in bringing the Coronavirus under control, which has in turn allowed for a further easing in social restrictions over the last month.

As for Chinese economic data, the Consumer Price Index rose 2.4% in May, slowing from the previous month’s reading of 3.3% and missing the consensus forecast of 2.7%. It was the lowest figure since March 2019. The Producer Price Index dropped by 3.7%, accelerating from April’s 3.1% rate of decline and missing the market consensus of 3.3%.

AUD/USD rose from 0.6960 to 0.7001 as of 11:07 GMT today, rebounding from the day’s low of 0.6932. EUR/AUD was down from 1.6286 to 1.6231 after rising to the session maximum of 1.6348 earlier. AUD/JPY opened at 74.99, fell to the daily low of 74.72 but bounced to 75.17 later.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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