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AUD once again powering higher against the US dollar

Written by Sam Coxhead on June 30th, 2011.      0 comments

3:45 PM (NZT) The AUD has been in high demand for much of the week, and in the last 24hours in particular. The anticipation of a positive result from the first Greek austerity vote saw the demand start, and the supporting result has seen the USD under some considerable pressure.
The spotlight in the short term will probably change from the European situation to that of Obama’s tense negotiations with the Republicans in Congress about the raising of the US debt ceiling. The longer it takes him to find a solution the larger the risk premium will be built into the US dollar. The Credit Rating agencies have already started to make statements about the full scale implications of not raising the debt limit.
At any rate, the current price is 1.0740 having blown through the resistance at 1.0720 easily. The 1.0800 level is the next target, but current levels obviously represent very good value buying of USD with AUD.
The lead for the AUD is being driven from offshore this week with an absence of meaningful domestic economic data. Next week is quite different with a variety of releases to focus on. Monday has Building Approvals and Retail Sales, Tuesday the Trade Balance and the cash rate announcement from the RBA(unchanged) and Thursday has the Employment numbers. No doubt the volatility will continue through the release for these pieces of data.
A good strategy to work through these periods of volatility can be to load orders for currency transfers at targeted levels. Please click here for a further description of these should you be interested in finding out more.
Please do not hesitate to ask any questions that you may have.