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Home ANALYSIS

The AUD is the strongest and the EUR is the weakest as the NA session begins

A.R Chowdhury by A.R Chowdhury
March 11, 2022
Reading Time: 8 mins read
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The AUD is the strongest and the EUR is the weakest as the NA session begins

forex

The strongest to the weakest of the major currencies

The  AUD 
AUD

The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central banking authority tasked with the management and issuance of AUD banknotes.What Factors Affect the AUD?The AUD is more susceptible than other currencies to macroeconomic factors. Overall, monetary policy is the largest mover of the currency, including interest rate differentials.Beyond Australia, commodity prices such as those of precious metals and others are also important to the AUD and can cause fluctuations in its value relative to other currencies.Global risk sentiment and confidence are also indicators that are closely tracked given their correlation to the AUD.This is due to the AUD being seen as a commodity currency, and also used as one of the most popular growth and risk proxies in global financial markets.Any positive mood in the global market will likely cause the AUD to climb, while if there is a prevailing pessimism, the AUD will often decline.On a domestic scale, government credit ratings can also impact the AUD. Australia’s credit rating influences the risk profile of its debt.This trend directly influences the cost the government has to pay on the debt it owes.

The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central banking authority tasked with the management and issuance of AUD banknotes.What Factors Affect the AUD?The AUD is more susceptible than other currencies to macroeconomic factors. Overall, monetary policy is the largest mover of the currency, including interest rate differentials.Beyond Australia, commodity prices such as those of precious metals and others are also important to the AUD and can cause fluctuations in its value relative to other currencies.Global risk sentiment and confidence are also indicators that are closely tracked given their correlation to the AUD.This is due to the AUD being seen as a commodity currency, and also used as one of the most popular growth and risk proxies in global financial markets.Any positive mood in the global market will likely cause the AUD to climb, while if there is a prevailing pessimism, the AUD will often decline.On a domestic scale, government credit ratings can also impact the AUD. Australia’s credit rating influences the risk profile of its debt.This trend directly influences the cost the government has to pay on the debt it owes.
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is the strongest and the EUR is the weakest as the NA session begins. The USD is tilting to the upside with gains against all  currencies 
Currencies

Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the population that uses that currency.For example, the United States dollar, (symbol $, code USD), or the British pound sterling, (symbol £, code GBP), also known as fiat money, since they are not linked to any specific asset, such as gold or silver. Such metals were traditionally used as the main method of payment, since they held real and actual value. Even after the introduction of paper notes, many countries maintained a gold standard for much of the 20th Century, meaning a unit of money could be exchanged for a fixed amount of gold. How to Trade Currencies?The modern world, with the invention of electronic networks, computers and the internet, has allowed the transfer of money to occur almost instantaneously. It has also spawned a new era in currencies, including digital money, such as Bitcoin and Litecoin. Not backed by any government, but based on a complex set of mathematical software algorithms, the ubiquity of the internet has generated interest and uptake of digital currencies, whilst providing relative anonymity. Digital currencies can now also be traded online, via exchanges and brokers, similar to trading foreign currencies, known as the foreign exchange market. Forex is the world’s largest market, with over $5 trillion turnover per day, where fiat, floating currencies are bought and sold against other currencies, such as the euro vs the dollar (EUR/USD), and the British pound vs the Japanese yen (GBP/JPY).

Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the population that uses that currency.For example, the United States dollar, (symbol $, code USD), or the British pound sterling, (symbol £, code GBP), also known as fiat money, since they are not linked to any specific asset, such as gold or silver. Such metals were traditionally used as the main method of payment, since they held real and actual value. Even after the introduction of paper notes, many countries maintained a gold standard for much of the 20th Century, meaning a unit of money could be exchanged for a fixed amount of gold. How to Trade Currencies?The modern world, with the invention of electronic networks, computers and the internet, has allowed the transfer of money to occur almost instantaneously. It has also spawned a new era in currencies, including digital money, such as Bitcoin and Litecoin. Not backed by any government, but based on a complex set of mathematical software algorithms, the ubiquity of the internet has generated interest and uptake of digital currencies, whilst providing relative anonymity. Digital currencies can now also be traded online, via exchanges and brokers, similar to trading foreign currencies, known as the foreign exchange market. Forex is the world’s largest market, with over $5 trillion turnover per day, where fiat, floating currencies are bought and sold against other currencies, such as the euro vs the dollar (EUR/USD), and the British pound vs the Japanese yen (GBP/JPY).
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with the exception of the AUD and NZD ahead of the CPI data which is expected to rise to a 40 year high (with more to come next month). Expectations are for 7.9% (from 7.5% last month) for the headline, and core YoY at 6.4% (from 6.0%).

The tide has gone out again after a one day reprieve that saw stocks move higher, gold tumble, oil tumble. Today, stocks are lower, gold is higher and oil is also higher. The vision from the rose colored glasses have become more murky again.

Russia and Ukraine met for two hours and made no progress. The bombing continues. The sanctions continue with the UK adding sanctions to the owner of the Chelsea Football club, Roman Abramovich. Abramovich had put the club up for sale. That idea is now put on ice (although provisions have been granted a “special license”, that will allow the Premier League club to fulfil its fixtures and for “staff to be paid and existing ticket holders to attend matches”.

That bullish feeling in bitcoin yesterday has turned to a bearish feeling today.

The ECB is expected to keep rates unchanged with focus on when quantitative buying will be stopped and if there is any expectations for a hike in 2022. Lagarde press conference starts at 8:30 AM ET

A snapshot of the markets currently shows:

  • Spot gold is trading up $16.13 or 0.82% at 2007.71
  • Spot silver is trading up $0.12 or 0.48% at $25.90
  • WTI crude oil is trading at $113.62 up $4.85 from the settlement price yesteray
  • Bitcoin is back below $40,000 at $39186 after trading as high as $42053 and as low as $38796.

In the premarket for US stocks, the futures are implying a lower open after strong gains yesterday

  • Dow is down –317 points after yesterday’s 653.61 point rise
  • S&P is down -39 points after yesterday’s 107.18 point rise
  • Nasdaq is down -192 points after yesterday’s 459.99 point rise

In the European equity markets, the major indices are also lower after the sharp gains seen yesterday

  • German Dax -2.8%
  • France’s CAC, -2.4%
  • UK FTSE 100, -1.2%
  • Spain’s IBex, -1.2%
  • Italy’s FTSE MIB -3.05%

In the US debt market the yields are modestly higher. The 30 year is up a bit more. Today the US treasury will auction 30 year bonds at 1 PM ET. The 3 and 10 year issues have been met with more tepid demand.

US ratees

US rates are modestly higher

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Euro rates

Euro 10 year yields ahead of ECB
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A.R Chowdhury

A.R Chowdhury

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