The AUSUSD has crossed over to the dark side today according to traders today. The .90 zone held a key psychological barrier. The was in the Aussie is due to the Feds announcing that the taper and low interest rates are a on the chopping block with signs of improvement in the US economy. Traders are eyeing a first quarter 2015 interest hike in the US. This means one of many thing but most importantly that parked funds in yield hunting products in Australia will start their migration back to US as the economy becomes investor friendly again.
Many traders continue to argue that weak production data in China are weighting in on the exchange rate as Ore demand slows. Traders are equally surprised that record weakness in US NFP data and record strength in the Australian employment data have not send the AUDUSD bullish.
Looks like Glenn Stevens may get his wish after all of seeing the AUSUSD near the mid .85 zone this year. Realistically via no course of action of his own. We believe that below .90 there is nothing to hold this pair from falling further.
Tomorrow we expect the RBA to provide monetary policy meeting minutes and to listen to the Reserve Bank of Australia’s Assistant Governor Kent speech. We are expecting happiness in the low rate here by the RBA.