[Stocks, FX] Australian dollar, the strongest currency in the world


The Australian dollar has been overwhelmingly strong in all currency pairs since February 2022. It has shown tremendous strength in all major currency pairs such as the US dollar, British pound, euro and Japanese yen, and even now in April, the momentum has not stopped at all. On the contrary, with the expectation of a rate hike in the Australian dollar, a further surge is expected. So today we will consider the current chart and why the Australian dollar is strong.



The chart below is the AUD / JPY daily chart as of April 5, 2022. The overwhelming upward trend has continued due to the collapse of the Japanese yen, and although it has fallen for a few days at one point, it has surged again from April 1. In the few days I stood up, it had risen by 3 yen, and the momentum did not stop at all. This trend may continue for some time as the Japanese yen is extremely weak.


The chart below is the AUD / USD daily chart as of April 5, 2022. At one point there was a strong buy in the US dollar, but overall it is a clear uptrend. It is overwhelmingly strong against the US dollar, and there is no hope that it will stop.


The chart below is the EUR / AUD daily chart as of April 5, 2022. The Australian dollar has been buying for a long time, partly because the euro’s power has completely weakened due to the Russian-Ukraine war. Occasionally there is a strong backlash, but the Australian dollar is still buying and is likely to be one-sided.


The chart below is a GBP / AUD daily chart as of April 5, 2022. The pound has been sold all the time, partly because the euro’s power has been completely weakened by the Russian-Ukraine war. There is little rebound, and the unilateral buying of the Australian dollar continues, and there is no sign that this trend will subside.

Why the Australian dollar is strong

And why has the Australian dollar been so strong so far? I tried to find out the factors based on the recent news.

The fall of the Japanese yen

It was the established theory that the US dollar and the Japanese yen would be bought in the event of an emergency, but despite the Ukrainian war, the Japanese yen has not been bought at all. Japan is by no means a safe country because it has been invaded by Russia and China. Due to the high risk, the Japanese yen has clearly been avoided. Under such circumstances, the Australian dollar is being bought instead.

Geographical factors

The reason why the Australian dollar is bought has great geographical implications. Russia and China are now the world’s problem children and disasters. However, Australia is so geographically distant that you can buy it with great peace of mind. On the contrary, Japanese yen, euro, pound, etc., which are close to Russia and China, are sold.

Decoupling with China

Australia is currently promoting decoupling with China. Most developed countries, with the exception of Japan, are heading towards Chinese sanctions. The value of the Australian dollar has risen relatively as its relationship with China, which has only risk, has diminished.

Expectations for RBA rate hikes

On April 5, 2022, the Reserve Bank of Australia decided to keep the official cash rate guidance target at 0.10%, the lowest ever, but continue to respond “patiently” with monetary policy. The expression disappeared, and it was possible that a hawkish signal was emitted, and the market price soared. With expectations for a rate hike in the Australian dollar rising in the future, a further surge in the Australian dollar is expected.