The Australian dollar’s epic rally continued overnight, extending its stretch of consecutive daily gains to seven — the longest seen in two years.
As has largely been the case in recent sessions, it was more about US dollar weakness, rather than Australian dollar strength, that propelled the Aussie higher.
Having succumbed to profit-taking in Asian and early European trade, something that saw the Aussie fall to as low as .7162, the AUD/USD started to grind higher as soon as US stock markets opened, presumably on the back of traders beginning to price in the likelihood that the minutes of the Federal Reserve’s September FOMC meeting released later in the session would be dovish in nature.
Predictably, as soon as the minutes were released – largely perceived to have been slightly dovish in nature – the Aussie hit its session high of .7271 before easing into the New York close.
The level the Aussie topped out at was the same the currency faltered at in September, suggesting that there are plenty willing to sell the currency in anticipation of renewed weakness in the period ahead.
This morning, despite the late reversal, the AUD/USD has clung onto most of its earlier gains, trading at .7249 as of 8.30am AEDT.
Looking ahead, the data calendar is light with Australian housing finance data for August the only release of note.
“On the data front in Australia today, housing finance data for August is released which could generate some AUD volatility,” wrote Elias Haddad, senior FX strategist at the CBA in his morning note.
“CBA economists expect the number of loans to owner-occupiers to increase by 5.0% MoM in August (consensus +4.7% MoM) and total value of all loans (owner occupiers and investors) to grow by 6% MoM.”
Should the data come out hotter-than-expected, it may help fuel further gains in the Aussie again today. Should the AUD/USD manage to close the week above .7257, it will mark the eighth consecutive daily gain in a row, something that will equal the longest winning streak for the Aussie since March 2009.
The full Australian dollar scoreboard is found below.
- AUD/USD 0.7249 , -0.0008 , -0.11%
- AUD/JPY 86.91 , -0.11 , -0.13%
- AUD/CNY 4.6052 , -0.0051 , -0.11%
- AUD/EUR 0.6426 , -0.0008 , -0.12%
- AUD/GBP 0.4725 , -0.0001 , -0.02%
- AUD/NZD 1.0863 , -0.0011 , -0.10%
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