The Australian dollar, that was in the shadows for a long time, showed impressive performance. Recently, the currency has been trying to rise amid favorable market conditions.
Experts have noticed that commodity currencies are gaining in value against all other currencies. The surge is caused by such factors as a rise in stock indices, higher prices on hydrocarbons, and a long-lived weakening of the US dollar. The Australian dollar could become the leader in the race of commodity currencies. At the moment, the Aussie is gaining in value in an attempt to recoup losses.
As a rule, the Australian dollar's attempts to reach new highs are successful. On Friday, April 16, the AUD/USD pair was trading at the level of 0.7738. A day earlier, it hit a new four-week high jumping above 0.7759. At the moment, it is trading in green. Analysts suppose that bulls of the Australian dollar can make use of the favorable market conditions. If the pair consolidates at the current level, they will enter the market. Some experts say that it is enough to consolidate within the range of 0.7650-0.7675 to jump to a new target of 0.8000 or even higher.
The Australian dollar was strongly supported by Australia's labor market data. According to the Australian Bureau of Statistics, in March, the number of jobs advanced by 70,700 exceeding forecasts. At the same time, the unemployment rate slid to 5.6% from 5.8%. Positive labor market reports pushed the Australian dollar above other commodity currencies. However, the situation was spoiled by the remark that the current increase was mainly caused by a jump in part-time jobs. Moreover, 20,000 full-time jobs were previously eliminated.
However, analysts remain positive supposing that the Australian economic recovery will somehow offset the negative information. Thus, in recent months, employment has been rising. Economic activity reached the highest levels in the last 70 years. According to the data from Westpac and the University of Melbourne, in April 2021, the consumer confidence index advanced by 6.2% to 118.8 points. It is the largest reading in the last 11 years.
Economists at TD Securities also provide positive forecasts for the Australian dollar. They predict that if the pair climbs above the resistance level of 0.7677, it will have all chances to rise further. The next target is located at 0.7750 that is on the way towards the psychological level of 0.8000.
China's macroeconomic reports have a significant influence on the AUD/USD pair. The fact is that it may affect both the Australian and global financial markets. Earlier, when the price of iron ore rose in China, the Australian dollar surged. Notably, China is the main trade and economic partner of Australia. Moreover, it is the main consumer of raw materials. Under the current conditions, the Australian dollar highly depends on the Chinese economic health.
Positive macroeconomic data from China allows the Australian dollar to spread wings. The same situation took place at the end of this week. On Friday, April 16, China reported on a starlight rise in its economy. In the first quarter, China's GDP showed a record jump of 18.3% on a yearly basis. During the given period, retail sales in China soared by 34.2% (the forecast was +28%, y/y) year over year, although the industrial production growth slowed down to 14.1% on a yearly basis. Analysts believe that this will provide commodity currencies, especially the Australian dollar, with an upward impulse.