Australian Dollar Ends Week Strongest, Gets Help from Metal Market

The Australian dollar rallied sharply during the past trading week, ending trading as the strongest most-traded currency on the Forex market. Other commodity currencies joined the rally, while safer currencies were left in the dust.
Markets were driven by risk appetite basically for the whole week. While there were plenty of reasons for optimism, including the positive outlook for global economic recovery and hopes for fiscal stimulus in the United States, market analysts named another factor as the major driver for the risk-on trade: the rally in the metal market. In particular, copper rallied past the $4 level for the first time since 2011. While Australia exports copper too, Australia’s major export is iron ore, which also has been showing amazing performance lately.
Meanwhile, the Canadian dollar joined the rally as well but was underperforming compared to other commodity currencies. There were various reasons for that, including poor domestic macroeconomic data and crude oil prices. While crude oil rallied at the start of the week due to the extreme colds in the United States, with the West Texas Intermediate grade rising above $60, prices retreated later and it looks like crude has hit the top, at least for a short term.
The New Zealand dollar was also strong, though there were very few major events driving the kiwi specifically during the past week. The next week will be different as the monetary policy meeting of New Zealand’s central bank will be the highlight of the week.
AUD/USD rallied from 0.7761 to 0.7868 during the week, touching the highest level since March 2018. EUR/AUD dropped from 1.5606 to 1.5399 — the lowest since December 2018. AUD/CAD advanced from 0.9841 to 0.9925, reaching the highest since June 2018.
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Original from: www.earnforex.com