Australian dollar at risk of increased volatility

The Australian dollar is facing pressure from rising interest rates and China’s lockdowns, which are reducing economic demand for Australia’s resources.

“What we’ve been looking at is we’ve got an unusually large amount of Aussie being bought from the conversion of mining company dividends,” Westpac Senior Currency Strategist Sean Callow told Sky News Australia.

“Because our yields have been rising as well, in terms of the spreads between the Aussie and other currencies it’s held roughly steady against other currencies.”