In the confrontation between two risky assets, the Australian dollar is currently winning, as investors view the Pacific and Asian regions as more promising at the moment. Expectations of a rapid global economic recovery also support the AUD, which allowed the currency to strengthen to a two-year low against the Euro.
This week, the value of the AUD depended on external factors that were in favor of it, but by the end of the week, the momentum was lost, and we observe the strengthening of the EUR for the second day in a row. The euro received support this week thanks to macroeconomic reports. In particular, the EU economy showed an improvement in the consumer confidence index, the strongest increase in inflation in a year and the growth of the HSI composite index of business activity, due to an improvement in the situation in the industry, while the service sector remains under strong pressure.
Next week will make the rates more volatile. Reports on business activity in China and Australia are expected. There will also be a meeting of the RBA, data on Australia's GDP in the fourth quarter, the trade balance, and from the EU we are waiting for the publication of the consumer price index.
In the current situation, we believe that the deals to SELL will be more effective: after retreating from multi-year lows, the AUD will be able to set a course for recovery and there will be more than enough reasons for this next week. Technical analysis indicators also indicate the long-term perspective of the deals on the trend.
