The Australian dollar is on the cusp of making history

Buda Mendes/Getty Images

To say the Australian dollar has been on an amazing run of late is an understatement. From the low of .6934 struck on September 29, the Aussie has now rallied more than 6% against its US namesake. It’s rallied for nine consecutive sessions, equalling the third longest stretch of daily gains since the currency was floated back in December 1983. A truly amazing recovery.

The chart below shows the Aussie has experienced just five longer winning streaks over the past 32 years.

And here’s the individual daily percentage change since the latest streak began on September 30.

As at 8.30am AEDT the AUD/USD currently sits at .7329, having hit a high of .7382 during the overnight session, a key Fibonacci level. In order to extend its rally to a tenth consecutive session, the Aussie will need to close above .7359 tomorrow morning.

Looking ahead today, Elias Haddad, senior currency strategist at CBA, believes the winning streak may be in peril. He expects a volatile session of trade on the back of the domestic and regional data calendar and a speech from RBA deputy governor Philip Lowe that arrives later this morning.

Here’s Haddad.

“AUD rose overnight to multi-week highs versus the USD, EUR, GBP and JPY. A small lift in iron ore prices and other base metals benefitted AUD. AUD will likely be supported today because we expect Australian business conditions to remain resilient in September due to low interest rates and a low AUD. Also, Australian business confidence is expected to receive a boost in September following the change of leadership in Canberra.

Nonetheless, AUD is unlikely to gain significant upside momentum. China‚Äôs September manufacturing PMI remained below 50 suggesting Chinese exports could contract in September by more than participants anticipate (consensus -6% yoy). This would add to signs that an improvement in Chinese economic activity remains mostly elusive. On the speaker front, RBA Deputy Governor Philip Lowe gives a speech today which could generate some AUD volatility. The title of his speech is Fundamentals and Flexibility and a Q&A session is to be expected.”

Philip Lowe’s speech will be delivered at 8.40am AEDT. This will be followed by the NAB business confidence survey for September at 11.30am, with Chinese trade data for September soon after at around 1pm.

The full Australian dollar scoreboard is found below.

  • AUD/USD 0.7355 , -0.0004 , -0.05%
  • AUD/JPY 88.27 , -0.05 , -0.06%
  • AUD/CNY 4.6491 , -0.0025 , -0.05%
  • AUD/EUR 0.6474 , -0.0006 , -0.09%
  • AUD/GBP 0.4792 , -0.0003 , -0.06%
  • AUD/NZD 1.0935 , -0.0016 , -0.15%

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