The Australian dollar has held on to a steady momentum in the last few weeks. It was triggered by the increasing commodity prices following the International crisis in Eastern Europe. Although the Reserve Bank of Australia is expected to keep the rates at 0.1% for the first half of the year, investors speculate an interest rate hike for the second half of the year. These expectations were substantiated by the increase in Australia’s 10-year old bond yields. Reportedly, the bonds climbed 100 basis points in four weeks and were just 3% short, becoming the highest level since 2018.
The interest rate hike is expected to be dropped in June, July, or August meetings. This will be the first-ever rate hike in more than a decade by the RBA, and analysts seem to have mixed opinions about this one. However, the Australian currency managed to take advantage of the momentum given by the speculations. The best online forex brokers in Australia believe that this hawkish perception about the current will really set off against its peer currencies. The AUD has already been steadily frowning against the feedback.
However, this journey is not going to be an easy one for the Aussie dollar. The Australian federal election is scheduled to happen in 2022. It might add a pinch of complications to the journey of the currency. Nonetheless, the RBA seems steadfast in its plans to keep the price steady during the elections. On top of that, the inflation gauge for March from the Melbourne Institute will be published after the final reading on retail sales for February and job advertisements from ANZ bank for March. These solid stats are also expected to fortify the position of the AUD.
The Asia-Pacific market, in general, kicks off the weeks with mixed views. India is planning to report PMI data for manufacturing for March. Reportedly, Taiwan will report business confidence in the same period. China’s economic hub Shanghai has gone into lockdown due to the increase in the number of cases. This is expected to reflect heavily on the prices in China’s stock market. The Shanghai lockdown comes while other countries are slowly bringing the covid restrictions down.
Oil prices remain under constant observation as the conflict between Ukraine and Russia seems to be ripening. This could still provide a much-needed impetus for the AUD/USD. The Australian currency seems to be doing well against the USD as well. The current bull run could push the price of the AUD to new heights in 2022. The token might feel some resistance at 0.7556, the highest position recorded in October 2021.