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Australian Dollar Has Best Week in 9 Months; Sterling Has a Shocker

A gain last week of 1.9 percent marked the Australian dollar’s best weekly performance versus the US dollar since December. The Aussie rebound continued with a touch of the $0.73 handle on Friday. Australia’s currency had been worth less than $0.71 just 10 days earlier. It settled for the week at $0.7285.

Further to gains against the US dollar, the Aussie, like everything else, had a windfall on Friday against the British pound, which slumped after the UK’s proposed terms for Brexit were comprehensively rejected by European leaders. The Australian dollar now buys £0.557.

Doing best against the pound on Friday was the euro—that had its best day versus sterling since November and ended the week buying £0.898.

With Brexit at the forefront, the euro continues to struggle against other European G10 currencies. While the euro-Swiss franc rate stabilized, albeit near one-year lows, the euro lost value in all five days of last week versus the Swedish krona, against which it now buys only Kr10.316—a six-week low.

With risk appetite returning, the US dollar and yen declined last week. Against a basket of currencies, the greenback has lost value in five of the past six weeks. Dollar-yen now trades at ¥112.55.

The New Zealand dollar, like its Australian cousin, is in recovery mode. At $0.668, it’s now 2.7 percent higher than the $0.65 print from September 12th, which was a nineteen-month low at the time.

In Asia, the Thai baht settled on Friday at a rate of ฿32.45 to the dollar, marking a fifteen-week high. One narrative that never seems to go away is the weakness of the Philippine peso which, at ₱54.12 to the dollar, approaches a thirteen-year low.

In the Americas, a NAFTA deal, or variation thereof, is still up in the air. The Mexican peso was little changed last week at Mex$18.81; meanwhile, the Canadian dollar tested, but failed to break, August’s low of C$1.2887.

Prominent events on next week’s economic calendar include Wednesday’s FOMC meeting, at which US interest rates are widely expected to be raised to 2.25 percent; ANZ’s measure of New Zealand’s business confidence, also on Wednesday; Thursday’s meeting of the RBNZ, which is unlikely to offer much in the way of new information; and Friday’s “flash” estimate for eurozone inflation.

 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
 
 

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