The Australian dollar is treading water

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The Australian dollar is steady in early trade on Monday morning, clinging onto gains achieved late Friday following the inauguration of Donald Trump as the 45th president of the United States.

Here’s the scoreboard as at 7.50am AEDT:

  • AUD/USD 0.7554 , 0.0001 , 0.01%
  • AUD/JPY 86.3 , -0.25 , -0.29%
  • AUD/CNH 5.1646 , 0 , 0.00%
  • AUD/EUR 0.7051 , -0.0007 , -0.10%
  • AUD/GBP 0.6101 , -0.0005 , -0.08%
  • AUD/NZD 1.0521 , -0.0016 , -0.15%

While the recovery in the Aussie was part of a broader US dollar move — the greenback closed lower on Friday after initially trading higher — Rodrigo Catril, currency strategist at the National Australia Bank, said the move also corresponded with the release of data from the US CFTC showing net positioning in the Australian dollar among speculators turned long for the first time in three weeks ahead of Trump’s presidential inauguration.

“CFTC data from the week ending January 17 shows USD speculative longs against G10 currencies were paired slightly with the net long position trimmed by 14,000 contracts to 237,000,” said Catril.

“AUD positioning was the highlight. After three weeks being short, speculators are now long AUD at 4,800 contracts and up 8,000 on the week.”

Net positioning is the sum of long positions less short positions, with a net long position indicating that most bets are backing the Aussie to rally right now.

AUD/USD 5-Minute Chart

Turning to Monday’s trading session in Asia, there are no major data releases or events scheduled, something that Catril says will almost certainly lead to a degree of caution among traders.

“Cautiousness is likely to be the theme for the start of the week as the market waits for the new US administration policy announcements,” he says. “The general uncertainty as well as push back on trade friendly policies suggests the AUD and NZD may struggle to make new highs this week.”

In the absence of no scheduled major market moving events on Monday, gyrations in US treasury yields, along with those in the Japanese yen and Chinese yuan in Asia, will likely dictate movements in the Australian dollar today.

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