Aided by strengthening investor sentiment and further short covering, the Australian dollar continued its good form overnight, rising to a high of .7234 before easing to trade at .7200 as of 8.30am AEDT.
To say the Aussie has enjoyed a decent run of late is an understatement – the AUD/USD has now rallied for six consecutive sessions, the longest stretch of gains seen since October 2013.
With no major data scheduled across the Asian region, analysts at NAB believe the reopening of Chinese markets will be influential on the Aussie today, particularly the USD/CNY fix that will occur around 12.15pm AEDT.
“All eyes on the return of the daily CNY fix following an 8-day holiday moratorium,” wrote Ray Attrill, global co-head of FX strategy at the NAB in his morning note.
“Recall that PBoC (or policy bank) intervention on September 29 pushed USD/CNH 120pips lower to 6.3575. Christy Tan, our head of Asia Strategy, expects a 50-100 point fall in the fix in USD/CNY to around 6.3560-6.3510, which would bring the fix to the lowest since Aug 13. We’d suggest a fall to at least this level is required to validate the moves we have seen in EM currencies as well as AUD and NZD, since the 29th.”
Aside from the USD/CNY fixing, Attrill believes there may also be some interest in a RBA discussion paper entitled “Modelling the Australian Dollar” that will be released at 11.30am AEDT.
“Any sound bites from the publication that opines on current valuations could prove market moving,” says Attrill.
The full Australian dollar scoreboard is found below.
- AUD/USD 0.7200 , -0.0004 , -0.06%
- AUD/JPY 86.4 , -0.05 , -0.06%
- AUD/CNY 4.5762 , -0.0026 , -0.06%
- AUD/EUR 0.6407 , -0.0005 , -0.08%
- AUD/GBP 0.4702 , 0.0001 , 0.02%
- AUD/NZD 1.0883 , -0.0012 , -0.11%