The Aussie dollar continues to defy gravity, or at least the expectations of many in the market.
Sure the release of capex data this week, which was stronger for 2014-15, helped the Aussie.
But the conundrum for traders, and those wanting to sell the Aussie dollar, has been that this strength has occurred amidst a continuation of iron ore’s price crash and a generally stronger US dollar. So at week’s end, the Aussie dollar is holding just above 93 cents against the US dollar.
Perhaps these two charts from the ANZ of the EPFR fund flow data, showing that capital flows have been positive back into Australian equities for some weeks now at the same time as an uptick in bond buying, help show why the Aussie won’t go down.
It’s not the whole story for Aussie strength but it certainly explains some of the recent buying.
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