Australian Dollar Article List

In late afternoon trade in London the pound to Australian dollar rate is 0.29 pct lower at 1.5548, the euro to Australian dollar exchange rate is 0.45 pct down at 1.3140, the Australian dollar to New Zealand dollar rate is 0.62 pct higher at 0.9791.

[NB: The above quotes are taken from the interbank markets - your bank will affix a discretionary spread to the retail rate they offer. However, an independent provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.]

Outlook for Australian dollar dominated by RBA decision

Having slipped through parity last week, the AUD/USD pairing continued to lose ground throughout the week, emulating the wider moves seen in the commodity market.

But could Monday's recovery prove short-lived should this week's key event fail to be supportive?

Chris Beauchamp at IG Index says:

"A key event this week will be the release of the minutes of the most recent Reserve Bank of Australia (RBA) meeting, where the bank cut rates by 25 basis points to 2.75%; the first reduction in 2013 and a decision prompted by weaker economic data.

"Though we can expect further commentary on this decision, the bank is likely to keep fairly quiet on whether we will see further rate cuts. Australian growth is predicted to slow further this year, which may prompt another rate cut, but the RBA will no doubt prefer to await further developments."

Traders turn bearish on Australian dollar

Adrian Schmidt at Lloyds Bank has gone through the latest data from the major US futures & options exchanges.


Live Charts and
Aus Exchange Rates



     

Exchange Rate
Forecasts 2013:

USD
GBP
EUR
AUD
NZD
JPY
CHF
CAD
SEK
NOK

The data is widely regarded as a window into the thinking of speculative traders, Schmidt says:

"AUD positions on the CME have turned net short for the first time since June 2012. Historically, AUD positions do not stay net short for long, as AUD downmoves tend to be short and sharp, as it traditional with carry trades.

"Of course, this time around the carry in the AUD is much less substantial than it once was, and the correlation of AUD/USD with equity and commodity markets has weakened a lot, so the market may be more able to hold short AUD positions for a longer period.

"Nevertheless, it would be surprising if there wasn’t some correction to recent AUD weakness before long, especially if the RBA minutes this week fail to give an indication of further imminent easing."

Forecasting more Australian dollar declines

One analyst who sees more declines for the Australian currency is Matthew Weller, Technical Analyst at GFT.

Weller says:

"Sell AUD/USD above .9775, stop at .9815, target at .9705. Move stop to breakeven on drop to .9735.

"Whereas we were waiting for the USD/CAD to retrace to its trend line before trading, the AUD/USD has already retraced back to its trendline. The pair has put in the ubiquitous Doji candle, showing the lack of momentum throughout the market in today’s early European trade.

"Nonetheless, with rates now testing bearish trend line resistance, there is a relatively low risk chance to sell the AUD/USD in line with the bearish trend of late.

"Specifically, traders could look to sell the AUD/USD above .9775 with a stop at .9815 (above the bearish trend line and .9800 resistance) and a target at .9705 (ahead of the .9700 round handle). With rates obviously oversold on a number of timeframes, it would be prudent to move the stop to breakeven if we see a meaningful move in our favor down to .9735."