The Australian dollar is rallying again

William West/AFP/Getty Images

The Australian dollar rose to the highest level since early November on Thursday, buoyed by strength in stocks and base metals along with a rally in the Canadian dollar.

Here’s the scoreboard as at 7.30am AEDT.

AUD/USD 0.7704 , 0.0038 , 0.50%
AUD/JPY 87.29 , 0.37 , 0.43%
AUD/CNH 5.0571 , 0.0249 , 0.49%
AUD/EUR 0.6488 , 0.0031 , 0.48%
AUD/GBP 0.5756 , 0.0026 , 0.45%
AUD/NZD 1.0985 , 0.0057 , 0.52%
AUD/CAD 0.9808 , -0.003 , -0.30%

The Aussie rallied hard against all majors except the Canadian dollar with the latter soaring close to 1% against the greenback following the release of strong inflation and retail sales data for November.

Greg McKenna, Chief Market Strategist at AxiTrader, said the move in the Canadian dollar was one factor that helped to boost the Aussie during the session.

“The big news was the strength of Canadian retail sales and inflation which saw the CAD rally 0.85% against the US dollar,” McKenna said.

“That, and more base metal strength, helped the AUD/USD take out the 200-day moving average and it sits back above 77 cents.

As seen in the 5-minute chart below, the AUD/USD rally popped higher at 12.30am AEDT when the Canadian data was released.

AUD/USD 5-Minute Chart

Slightly weaker-than-expected US GDP and initial jobless claims figures released alongside the Canadian data, along with strength in stocks and base metals prices such as copper, saw the AUD/USD push above its 200-day moving average, leaving it at the highest level since November 3.

“Now that the 200-day moving average at 0.7692 has been bested, some traders will also take that as a bullish indication,” Mckenna says.

AUD/USD Daily Chart

Turning to the day ahead, there’s little on the economic calendar to excite those still in the office, especially in Asia.

There’s absolutely nothing released until Europe with final readings for Q3 GDP in the UK and France, along with German import prices, the headline acts.

In North America, US durable goods orders, personal income and consumption data, including all-important core PCE inflation — the Fed’s preferred measure of gauging price pressures — along with new home sales and the final reading of the University of Michigan consumer confidence report for December will also be released.

Given the data flow, one suspects that if there is to be any volatility today, it will likely arrive in the second half of the session.

“Liquidity remains thin so there are risks of gappy moves,” says analysts at ANZ Bank. “Our bias remains for the AUD to move higher.”

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