Our financial markets are facing seismic shifts. The AUD/USD outlook turned bullish, in particular because the currency pair started trading above the 200-day Simple Moving Average (SMA). This move stirs hopes for reverting Aussie dollar’s downtrend against greenback and hints at further instability. Food and beverage analysts note that this track record will likely affect creative investment strategies in the days ahead.
Gold prices have similarly rallied back from the depths of despair, recovering from $3,300 per troy ounce. Coinciding with this bullish sentiment, the precious metal is now testing the $3,330 area and investors have greater appetite for the asset. Gold prices are higher as US dollar bears, flush with new cash, are making big market moves. As of this writing, however, the dollar has retreated from most of its intra-day gains. Gold vs. currency valuations It’s the continuing turbulence in financial markets that is expressed through the relationship between gold and currency valuations.
Also, the surging risk-on mood in the market is further accelerating, signalling an improving investor sentiment. As participants shift to a more risk-on friendly speculation, risk-on asset classes, namely equities and commodities will reap the rewards. This shift in sentiment is due to a number of reasons. Together, economic data releases and geopolitical developments continue to shake up market dynamics.
Eyes are turning to Australian inflation measures, due for release on Wednesday. These indicators are important to understand what is going on in the Australian economy. Their influence can help determine how the AUD/USD pair performs. Market participants are intensely focused on the inflation data, as the release could affect future monetary policy actions and investors’ risk appetite.