The Australian dollar is back trading at .7585 cents level this morning after a brief rally yesterday.
“The bears chased it (Aussie dollar) back to below .76 cents after it went as high as .7632 on the back of the Reserve Bank of Australia’s (RBA) decision,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
According to McKenna, the Aussie’s rally that accompanied the release of RBA statement yesterday had no grounding in fact. Not fundamental facts anyway.
“I say that because there was nothing in Governor Lowe’s statement that was materially different than expected except perhaps for his changed language about lending standards for Australian housing,” McKenna pointed out.
He said that on balance, the overall statement could easily have been one which left the door ajar for another cut if it hadn’t been for these concerns about lending.
“So nothing fundamental to support Aussie buying,” McKenna said.
At the same time, he said “The worm could actually be turning for the Aussie with commodity prices starting to roll over and stocks pulling back a little as traders get set for next week’s US Fed meeting and expected rate hike.”
And the impending rate hike in the US is not the only factor putting pressure on the Aussie dollar.
“My sense is that the consolidation of the Trumponomics rally is upon us. And that is weighing on the Australian dollar at the moment,”
He also mentioned, “Worth noting though is the release of Chinese trade data today. It’s a big number for global markets because it signals on both the health of the Chinese economy – Australia’s biggest trade partner – and it also signals on the health of the global economy,”
“That’s important for the Australian dollar,” McKenna said.
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