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
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