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Aussie dollar rebounds

Announcement posted by Profile Booster 04 Jul 2016

4 July 2016: SYDNEY -- The Aussie dollar has rebounded and is currently trading around 0.7490 level after gapping down at the open this morning.

“The Aussie is pretty much where it finished off last Friday. We see quite a subdued response (from the FX market) at the open this morning, so I don’t think the Federal election results is the main driving force behind the currency moves,” said Adam Taylor, senior currency analyst at GO Markets.

According to Taylor, “The main catalysts continue to be daily fluctuations in global commodity prices and a surging US dollar following the Brexit referendum.”

He pointed out that the Aussie dollar rallied last Friday, but the move was likely to be attributed to surges in iron ore prices as opposed to any speculation relating to the Australian Federal election.

“Chinese iron ore prices saw a weekly gain of around 7% and this bullish sentiment in steel pricing would benefit the Aussie dollar,” Taylor said.

He added that traditional safe haven currencies such as the US dollar and Japanese Yen retain their dominance within the FX markets as investors remain spooked in light of the recent Brexit vote.

In the meantime, as markets eye the Reserve Bank of Australia’s decision tomorrow, Taylor said there is an overwhelming sentiment from analysts that the RBA will leave rates on hold in July.

“That being said, many analysts are also leaning towards further cuts later in the year which could see the interest rate figure steadily decline in the longer-term,” Taylor said.

 According to Taylor, “We may see the Aussie mildly fluctuate throughout the week as political updates are released surrounding the recent election. Apart from this, we will be monitoring the commodities space for any potential sparks to the Aussie dollar,”

“As expected, many traders are sitting on the sidelines until more of a directional bias can be established.”


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 For more information or additional details, visit: https://www.gomarkets.com.au/