Aussie Gains as the Greenback Retreats

Currency speculators flipped from net short to long positions in Australian dollar in the week ending January 20, according to the latest data from the Commodity Futures Trading Commission.

The Australian dollar rose for a third day, up 0.2% to hit 0.76 per dollar, the level last seen in mid-November.

Overnight, the U.S. Dollar Index dipped below the psychologically important 100 mark, after President Donald Trump‘s Treasury Secretary-designate Steven Mnuchin reiterated his previous view that “excessively strong dollar may be negative in short term”. Trump said in an interview with The Wall Street Journal last week that the dollar was “too strong” and “it’s killing us.”

Can Australian dollar go higher? Stephen Innes, senior trader at OANDA, is skeptical:

Given strong Australian position in the Global Supply Chain and the negative implication from probably regional trade disruptions,  the Aussie underperformed  G-10 peers overnight. Also, the Aussie bulls are probably holding back due to the slide in Iron ore prices.

But where the iron ore prices are going is defying analysts’ predictions. This morning, iron ore futures in mainland China soared again, up 6.2% as we hit close to noon break

BARRON’S ASIA

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and specialises in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is based in Singapore as the Head of Trading Asia Pacific with OANDA.Stephen's market views focus on the movement of G-10 and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

Latest posts by Stephen Innes (see all)