The Australian dollar is trading just under .80 cents this morning after it tried to rally last Friday.
“.80 cents is the new black for the Aussie dollar,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
“The Aussie made it to as high as 0.8035 as the US dollar came under pressure after poor data releases for retail sales and industrial production combined with a surging Pound,” he added.
According to McKenna, the Australian dollar is ostensibly doing quite well here at 80 cents or thereabouts.
“But that is largely because the US dollar hasn’t really kicked on with its recovery and also that the global growth backdrop has been so solidly in the Aussie dollar’s favour for some time now,” he said.
But he noted that there are some signs that perhaps traders are moving away from the kind of assets that are usually associated with the Aussie strength.
“Metals prices have been under pressure over the past week or so. Copper and iron ore are just sitting on support level and could face some retracement,”
“And that would hurt the Aussie dollar,” McKenna said.
However, he said that while metals prices could be an indicator of the Aussie dollar’s movements, the recent price action on metals could also mean that investors may be looking at other assets at the moment.
“It’s possible pointer to the fact that investors focus might be moving to other assets once more. Naturally, it doesn’t guarantee the Aussie will fall as there are still many positives,” he said.
In the meantime, McKenna said this will be a big week for currency traders with the Federal Open Market Committee (FOMC) meeting.
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