The Australian dollar surged to a 15-month high of US67.60¢ on Wednesday, also reaching multi-month peaks against the euro, pound, yen, and Canadian dollar. The surge was fuelled by a rally in commodity prices, providing strong support for the Aussie.
According to Carol Kong, a currency strategist at Commonwealth Bank, the AUD/USD exchange rate has shown remarkable resilience, rising approximately 1.2 per cent this week despite renewed geopolitical and trade tensions. Kong noted that a weaker US dollar, expectations of Reserve Bank of Australia (RBA) rate hikes, and elevated metals prices are key factors underpinning the Australian dollar’s strength.
Gold prices have exceeded $US4800 for the first time, while silver and copper have recently hit record highs. Australia benefits significantly from these price increases, as it is a major exporter of all three metals. As of 9.30am AEDT, the Australian dollar was trading at US67.59¢, resisting broader gains in the US dollar after Donald Trump retracted a threat to impose tariffs on European nations and announced a framework agreement with NATO regarding Greenland.
Anticipation surrounds the release of a strong Australian job report at 11.30am AEDT, which could potentially lead to a test of the September 2024 high of US69.42¢. Investors are closely watching economic data releases for further indications of the currency’s trajectory.
