AUD Trading Outlook
Australian Dollar (AUD) was less buoyant than most other majors in light of growing optimism, despite its perceived role as a favoured risk yielding currency. RBA minutes released earlier in the week highlighting the possibility of a rate cut in coming months, added to the short lived euphoria of IMF categorizing the AUD as a global reserve currency on Monday, the AUD failed to track the sharp shift upward, with a slow grind higher from levels near 1.0335 toward 1.0380 in early Asia (Thursday)
Australian Dollar (AUD) continued to be pressured by weak US stocks with support at 1.0350 broken in Europe and we hit day lows at 1.0310 later in the US session. Most AUD crosses have been giving back gains in the last two trading days but they have been strong over the last month. AAA rating and high interest rates should allow the Aussie to do well once the risk aversion settles down.
Australian Dollar (AUD) dipped under 1.0400 briefly but strong buying has seen the uptrend resume during the US session and we are close to the 1.0440 resistance. Falling expectations that the RBA would be cutting rates has changed the feel of the AUD and the soft landing for China’s economy has put the focus back on the topside. Looking ahead, Update Q3 New Zealand Retail Sales forecast at 2.1% vs. 4.8% previously.
Australian Dollar (AUD) was well supported with a reconfirmed AAA rating and strong inflows into Australian Bonds. China’s Trade balance surged on exports and received lots of attention over the weekend with many analysts seeing this as evidence of a soft landing. EUR/AUD is grinding lower with the high yield and safety making the Australian dollar very attractive to long term investors. Looking ahead, October Australian Business Confidence.
Australian Dollar (AUD) strong Chinese economic data over the weekend is sure to support the AUD this week with it becoming clear China’s economy will have a soft landing. Further Chinese Stimulus is also on the cards with the change in leadership last week opening up the door for fresh ideas. Update China October Trade Balance at 32bn vs. 27.1bn forecast.
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