The Australian Dollar has been heavily sold off in the past few days, falling from a high of 0.7276 and dropping almost 2.5% to reach a low of 0.7023 this morning against the US Dollar.
We have spoken in previous posts about the potential strength of the US dollar as interest rates rises moved closer, and with this week they spoke about a March rate rise, the US Dollar has been the biggest mover this week across the board.
The US Federal reserve this week provided a very hawkish outlook, the US also reported huge Q4 economic growth, with GDP up at an annualised pace of 6.9%, much better than the 5.5% expected, these releases this week has seen a massive demand for the USD and as such a large move in currencies.
The next level of concern for the AUD to USD exchange rate is the December 2021 low of 0.6992. It previously bounced off this level in December and many businesses will be hoping for a swift recovery, otherwise facing rates in the 0.60's for the first time in a long time.
There is both a lot of support at that 0.70c level, and also it's always been a strong psychological level in the markets, so the next few days and early next week will be really key to see which way this will move.
The Australian Dollar has fallen heavily across the board overnight and in the past few days, with rates against the main pairs down:
AUD/USD - 0.7029
AUD/GBP - 0.5256
AUD/EUR - 0.6311
AUD/NZD - $1.0687
The strength of the USD has also seen the EUR/USD reached an 18 month low (June 2020) and is sitting just above $1.11 today.
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