Aussie Dollar Resilience


The Australian dollar jumped to a two-month high after data showed China’s economy expanded at a faster-than-expected pace in the fourth quarter of 2016.

China is Australia’s No.1 trading partner while the Aussie is often seen as a liquid proxy for the yuan.

The dollar is currently trading at US75.82¢, just below today’s peak of US75.89¢, a level not seen since November 11.

The Aussie is up about 1 per cent this week and is on track to clock its fourth straight weekly gain. It is up 5.3 per cent in January so far, making it one of the best performing major currencies in the world.

“I have been fielding more questions about the Aussie’s resilience over the past 24 hours than any other currency,” said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific.

“Australia (is) an oasis in this politically contentious global environment. In addition to the political stability, yields remain attractive.”

The Aussie extended its winning streak elsewhere. It touched a 1-1/2-year peak against the euro after the head of the European Central Bank pointed to subdued inflation and the need for further monetary policy stimulus. It also rose on the yen to be near a one-month high.

Investors are now awaiting the inauguration of Donald Trump later on Friday for further cues. Trump will be sworn in as the 45th president of the United States.

“Donald Trump will take centre stage as we begin a new chapter in American politics and global financial markets. Buckle up as we are likely in for a wild ride these next 100 days,” Innes said.

The Sydney Morning Herald

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 currently 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. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, 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