The Aussie dollar is stubbornly rejecting the notion that it should be lower.
For traders though it doesn’t seem to matter that iron ore is falling, that coal is under pressure or that the RBA continues to say the Aussie is high by historical standards – the buyers keep coming.
Just how starkly they buyers are rejecting convention – perhaps in favour of the carry offered by Australian interest rates – is best shown by the latest CFTC (Commodity Futures Trading Commission) report from the US which shows that thEre was more buying of Aussie dollars in the week to last Tuesday.
The ANZ reported yesterday that traders added a net 5,300 contracts long (buy) in Aussie dollar trade which pushes the net positioning (longs – shorts) to 33,700 long. That is huge statistically as the Aussie is the only net long position outside the last 12 months’ range.
Interestingly – and why this is not necessarily a signal to sell – while the buyers might be more aggressive than they have been for a year, there is plenty of room for more buying based on the last three years’ trade.