USD Crashes as Global Recession Fears Dissipate

AUD

The Aussie Dollar opens mostly higher against the major currencies, following data indicating that the American economy is overperforming and improving risk sentiment. The ASX followed suit and closed +1.1% higher, with the Shanghai Comp +0.1% and Nikkei 0.0%. Commodities also performed well with Silver +3.2%, Sugar +1.4% and Copper +1.2%. No major economic data is due to be released from Australia and China until January 7th with Aussie CPI m/m and Trimmed Mean CPI m/m (the main indicator that the RBA uses for inflation estimates). Regardless, higher volatility than usual can be expected due to the lower trading volumes over the Christmas period.
 

USD

The AUDUSD opens at 0.6701, trading at 13-week highs and 7 basis points off 2025 highs. American economic data was released last night, showing strength in their economy and spurring risk-on attitudes in markets. Wall Street digested the news well with the Dow Jones closing +0.2%, S&P 500 +0.4% and Nasdaq 0.5%. The main data piece was Prelim GDP q/q at 4.3% (exp. 3.3%). Tonight will have Unemployment Claims (exp. 223K), which will help provide guidance on their underperforming labour market.
 

EUR

The AUDEUR opens at 0.5681, trading sideways with no major events happening from either side. Equities followed suit, with the Dax closing and Cac closing %. No news out of Australia and Europe for the rest of the year, so the majority of the volatility would be from lower trading volumes and macroeconomic factors.
 

GBP

The AUDGBP opens at 0.4958, trading sideways due to a lack of data released during the Christmas period from both countries.
 

NZD

The AUDNZD opens at 1.1473. No data out until 2026, however the NZD has been the worst performer in the top 10 most traded currencies in 2025, following a poor performance in 2024.