The Australian dollar might look like an obvious short opportunity as commodity prices grind lower but one prominent strategist has warned that the currency might sting speculators who fail to see signs of improving domestic demand.
That is a big shift from what he said just a month ago when Stevens highlighted that “the Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies.
The Australian dollar jumped off session lows after the release of better-than-expected trade and retail sales data. Retail sales grew 0.7 per cent in June from a month earlier, beating economists forecasts for 0.4 per cent growth.
The Australian dollar immediately bounced back on the announcement and as the London markets opened this morning, it had retraced against the Pound by over 3 cents from its close on Monday's trading session to rates we haven't seen since 23 July.
Investor flight to safety and sinking commodity prices have driven the Australian dollar to new six-year lows this week, as the Aussie slipped below US74� for the first time since May 2009 in overnight international trade on Tuesday.