The return of commodity currencies and crude oil

Australian dollar, recognized as the so-called commodity currency, it gains in value. The actions of the Australian central bank, as well as the rise in oil prices, may contribute to this.

At the last meeting in 2021 Reserve Bank of Australia kept (for the 13th month in a row) the interest rate at a record low level of 0,1 percent. It was a move in line with market expectations. The Bank's representatives argued that while inflation had increased, it remained low in the base terms. Policymakers noted that with modest wage growth, inflationary pressures are lower than in many other countries.

Are low rates good for the Australian dollar? 

The Bank's Council reiterated that it would not raise the monetary rate as long as actual Australian inflation did not stay within the 2-3% target range permanently. The labor market is also to be strong enough to generate a significantly higher than currently wage growth, and this will probably take some time, hence the Bank's Council is armed with patience.

The Reserve Bank of Australia will continue to buy government bonds at an AUD 4bn weekly rate until February, when it reviews operations. The bank does not expect the omicron to hinder Australia's economic recovery.

The Australian dollar appears to have been appreciating in the past two days. This week, the AUD / USD rate first fell to its lowest level in more than a year, testing the 0,7000 level. Following the Bank's announcement AUD / USD rate However, it has already touched around 0,7100, which seems to be the biggest increase since the end of October.

Omicron not so dangerous, oil up

They also grow crude oil prices. WTI oil futures climbed more than 2% to over USD 71 a barrel on Tuesday, prolonging the nearly 5% rebound in the previous session as concerns about the coronavirus omicron variant and its impact on global economic growth and fuel demand. Saudi Arabia raised its monthly oil prices in Asia and the US on Sunday.

Previously, oil prices may have fallen due to the uncertainty related to the new variant of the coronavirus and its economic implications, but also in response to the announcement of the release of strategic reserves of the raw material by major oil-consuming countries.

A South African health ministry official, which was one of the first omicron outbreaks, said over the weekend that cases of infection with the new coronavirus mutation showed only mild symptoms. Anthony Fauci, the US chief infectious disease officer, said the preliminary data on the new variant did not seem alarming.