Australian dollar to highest since Oct 16
The Australian dollar is surging to start the month. Trade numbers in Asia-Pacific trading kicked off the rally and it was further fuelled by the RBA. Third quarter GDP data is due later.
I made the case for longs yesterday. For me, the coast is clear until 0.7380, which was the October high.
The market is falling in love with Australian yield again. Aussie 10-years yield 2.83% and the advantage over Treasuries is growing starker with US 10s down 6 bps today.
Technically, there is a band of resistance that stretches up to the 200 day moving average at 0.7471 that's concerning but the underlying demand in AUD/USD for the past month despite commodity weakness has been remarkable and bodes well for the future.
