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Daily market commentary: It has been a good week for the Australian dollar



ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for April 10, 2020. This is not a trading advice. See details below:


FOREX

It has been a good week for the Australian dollar, gaining more than 5% to the US dollar since the opening of the market on Monday. The Aussie’s vitality comes from all the stars aligning in support of the currency. On Monday the Royal Bank of Australia decided to keep rates on hold at a time when other central banks are cutting while the recovery in oil prices also helped as the Australian dollar’s performance is closely linked to that of commodities in general.

Finally, the improvement in market sentiment, with investors glass half-full stance is also offering support to the risk-related Aussie following signs that the number of coronavirus infections is declining in Europe and the US, the current epicentres of the disease, as well as the reopening of Wuhan for business after three months of quarantine.

AUDUSD chart

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market analysis

GOLD

Gold is shining with the spot price closing in on its 7-year-high at $1,700. Bullion rallied after the announcement of the Federal Reserve’s new coronavirus stimulus. Another $2.3 trillion of lending will be in the system to soften the impact of the pandemic emergency. As mentioned in previous comments, markets are understanding and pricing in every day that central banks will be forced to create a huge amount of new liquidity.

The amount of cash in circulation is growing much quicker than the gold, which of course cannot be printed. Gold production is increasing the amount of gold in circulation by less than 2% per year, while the monetary mass is dramatically increasing week by week to mitigate against the impact of the virus.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: It has been a good week for the Australian dollar

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