AUD/USD
AUD/USD gained +1.8% in August, after a significant decline in the first week of the month, which took the rate under parity for the first time since March. Australian and U.S. economic numbers released during August were mixed to mostly weaker, indicating a slowdown in both economies.
After correcting sharply lower to 0.9926 in early August, AUD/USD pushed up later in the month to peak at 1.0763 on August 31st. Nevertheless, the rate failed to best the post-float high of 1.1080 seen on July 26th and so another downward correction ensued that fell as low as 1.0485 by September 6th.
AUD/EUR
AUD/EUR declined by -2.5% overall in August. The rate initially declined due in part to increased confidence of a possible resolution of the European financial crisis, along with massive asset flows out of risk currencies and into the Greenback and the Japanese Yen and to a lesser degree to the Euro and Sterling. Also weighing on the cross were corrective moves lower in precious metal and oil prices. After making a new long term high by only one pip at 0.7733 on July 27th, AUD/EUR came off sharply during early August, falling as far as the 0.7010 level by August 8th. The cross then corrected higher during late August, reaching 0.7538 on the 31st, before coming off briefly to 0.7423.
GBP/AUD
GBP/AUD reversed its downward trend in August, gaining by +1.8% on the month. Sterling appreciated overall, as the Aussie was hit with weaker economic data, lower commodity prices and increased risk aversion from global financial uncertainty. After GBP/AUD made a new post-1983 float low of 1.4759 on July 27th, the cross then corrected sharply higher to reach 1.6386 by August 8th. Nevertheless, GBP/AUD failed to sustain those gains and header lower again, falling as far as 1.5031 by August 31st, before bouncing a bit to the 1.5319 level.
For a full fundamental and technical outlook for the AUD please see the attached reports.
