The Australian Dollar continued to trade lower last week as hawkish commentary from Federal Reserve Chair Janet Yellen fueled near-term rate hike speculation, weighing on the yield-sensitive currency (as expected).
Everyone, including Australian dollar traders, is waiting for US Federal reserve chair, Janet Yellen, to speak at the Jackson Hole Symposium later on this evening, hoping that she'll provide some impetus to markets one way or another.
Australia's resilient currency will harm its terms of trade, ANZ says, while revising up its forecasts for the dollar as foreign yield-hunters continue to bid up the currency despite a lack of economic fundamentals to justify the rally.
Although Retail Sales in the month of July is the biggest data release for the Aussie dollar in the week ahead, it is less likely to move the currency as much as the travails of iron ore, the country's largest commodity export.
"People usually focus on the price of flights and accommodation, and overlook and underestimate the value of the dollar," said Expedia's Australia and New Zealand head, Georg Ruebensal. The average price of hotels in Sri Lanka has nose-dived. Photo: ...
The US dollar came under selling pressure overnight. Whether it was the pound reacting to the surprising strength of UK retail sales, the Yen driving the USD below 100, or the Euro heading toward 1.14 it was a night where the bears had the whip hand.
It's been a wild ride for Aussie dollar traders this week with Monday's low of 0.763 giving way to last night's high of 0.7749 when the US dollar was under pressure and the yen was trading down through 100 to the dollar.