Australian Dollar Accelerates, Market Waits for April’s Import Figures

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Australian Dollar Accelerates, Market Waits for April’s Import FiguresThe Australian dollar surged on Monday morning trading in Sydney on favorable commodity markets last Friday.

The currency was trading at 93.73 U.S. cents as of 6:30 a.m. local time, up from Friday’s close of 93.48 cents. The Aussie fell on Friday, down from Thursday’s close of 93.90 cents. So far, the currency has been trading below 94.00 cents, reported the Australian.

The Australian dollar was hurt by the surge in the prices of U.S. Treasury bonds, said Richard Yetsenga, the head of foreign exchange at ANZ. The Aussie has recently benefitted from decline in bond yields in most advanced economies, as local bond yields surged, attracting foreign investors.

“There’s a little bit of risk-off trade and that came through in the Aussie last night,” said Yetsenga. “It’s all about US Treasuries. People are waiting on the US market to give some direction.”

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However, David de Ferranti, a market analyst with FXCM was of opinion that the fact that FX traders were cautious ahead of key economic data this week.

“The marginal declines in the Australian and New Zealand dollars overnight are likely tied to broad-based risk aversion, which tends to weigh on the high-yielding currencies,” he said. “If we see the pullbacks in US equities continue, a drive to safe haven plays could see the Aussie finally drop back below the 93 US cent level.”

On Monday, the Australian Bureau of Statistics is expected to release data on merchandise imports, while the Reserve Bank of Australia is expected to announce the minutes of its board meeting in May on Tuesday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com