There is a battle raging in currency markets this afternoon as traders work through buy orders in the Aussie dollar and sellers try to break it wide open.
It not just Aussie selling but rather USD buying that’s driving price action with the Yen also weaker in early Asian trade today (it’s only 1 pm in Tokyo at the moment).
Word on the street is that the Aussie-specific selling is originating from macro funds. No doubt they are a little worried by the change in rhetoric from the RBA, as well as iron ore’s not-so-quiet crash.
And don’t underestimate the impact of Clive Palmer and Jacqui Lambie’s spat in Canberra today as a new and unusual source of investment and political risk in Australia.
At the moment the Aussie’s down at 0.8670, more than 60 points from the overnight high of 0.8730 and the buyers remain stubborn. It seems there are now less reasons to buy Aussie, given the RBA and iron ore.
So it seems likely the sellers will be lining up in trenches atop 87 cents.
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