CHART OF THE DAY: The Aussie Dollar Rocketed Higher Last Night

The Aussie dollar sits at 0.9355 this morning, up 0.84% on the day, but it has nothing to do with the RBA’s upbeat take on the economy we saw from the governor’s statement yesterday.

Euro overnight moved up through 1.39 and the pound is closing in on 1.70, hitting levels overnight not seen since 2009. The yen is stronger as well, sitting at 101.63 this morning.

It’s all about the US dollar and the outlook for the economy and interest rates. Adam Button from forexlive.com said that the big fall in the US dollar overnight is linked to the latest rally in US interest rates which saw the 10-year yields fell to 2.59% at one point before closing at 2.60%.

Button says traders are watching the 10’s closely and “the critical level to watch is the February low of 2.568%. If that breaks, the US dollar will completely roll over.”

If so, expect the Aussie dollar to roar toward 95 cents.

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