AUDUSD recovers on commodities boom

THERE seems to be light at the end of the tunnel for the Covid-19 pandemic, and the market narrative certainly does display signs of those. With vaccines by Pfizer and Moderna slowly being rolled out and distributed globally, the Merchant Commodity Fund (MCF) predicts that this positive chain of events and the eventual end of the pandemic will likely see an increase across all aspects of consumption, from retail to travel.

This in turn has likely led to a commodities boom, in which various products such as iron ore, copper and soya beans surged to their highest levels in six years.

In light of the positive sentiment, AUDUSD similarly has traded to new highs in recent weeks, breaking above US$0.8000 for the first time since Feb 2, 2018. Despite a meteoric and rapid rise to record highs, sentiments and risk appetites of traders and the market can change in an instant - and this can cause volatile price swings and quick trend reversals.