Risk aversion be damned. Risk-taking is back in vogue with commodity currencies and emerging market currencies both in heavy demand today. Traders appear to be looking for “alpha” or extra returns beyond the norm, and are seeking out the riskiest possible alternatives. As noted earlier, this is a very bold strategy given how unclear the global economic outlook remains despite recent signs of economic stabilization.
AUD seems tame relative to the flows Turkish lira, South African rand and Brazilian real reported today, but a rising tide lifts all boats and AUD is rising toward the highs posted last Friday at 0.7869. We trade now in the 0.7850s up from 0.7745 in early US trade. CAD is even perkier than AUD today. making a newsfor its trend. USD/CAD trades now at 1.1182, the lowest since early October.
