Aussie dollar under pressure

SYDNEY]The Australian dollar fell to four-month lows on Thursday, while the New Zealand dollar was vulnerable after the Federal Reserve remained upbeat on economic growth, setting a fire under the US dollar.

The Australian dollar skidded to US$0.7408, its lowest since mid-January, having dropped around a US cent and a half on Wednesday. It has lost 1 per cent so far this week, largely due to a shakeout in Aussie long positions.

“A break of the US$0.7400 level will send the Aussie longs running for the exit and could add more fuel to the downside momentum,” said Stephen Innes, a senior trader at OANDA.

The next level of support was found at US$0.7385, the 61.8 per cent retracement of the January-February move.

Much of the Aussie weakness came after the Fed made positive comments on the job market, reinforcing expectations of a rate hike in June.

Also undermining the Aussie was a sharp 6.5 per cent fall in iron ore on Wednesday. Iron ore is Australia’s top export earner.

Markets found little comfort from a lower-than-expected Australian trade surplus, which slowed to A$3.1 billion in March from A$3.6 billion in February.

The Business Times via Reuters

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

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, 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)