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The AUD powers ahead against the US dollar

Written by Sam Coxhead on October 28th, 2011.      0 comments

12:05 PM (NZD) The AUD started the week in demand as enthusiasm about the EU summit on the European debt plan gained momentum. This enthusiasm started to run out of steam as it became apparent that there were sticking points in the negotiations, and especially when the finance ministers meeting that was precede the EU summit was cancelled. Adding to the period of weakness was the lower than expected inflation report in Australia, as it pushed the interest rate market to fully price in the cash rate cut from the RBA next week. Since the EU summit started, the global risk aversion turned around and this obviously benefitted the AUD. The momentum really gathered pace as the news came to hand that the final goal had been reached, and the deal was done to complete 50% voluntary write downs on Greek debt. The positive US GDP number overnight added to the momentum , that has seen a very sharp reversal of investors anti-risk trades.   The pair is now close to crucial resistance levels at 1.0765, and the current levels represent very good value buying of USD with Australian dollars.
The current interbank midrate is:            AUDUSD   1.0705                                                                             
The interbank range so far this week to date has been:                 AUDUSD 1.0312 – 1.0753