Australian Dollar Sudden Change Out Of Inverted V Type
On Monday (March 14th), the Australian dollar plunged sharply against the US dollar at the end of the Asian market. At the beginning of the reform and the intraday rally, it suddenly refreshed its eight month high of 0.7594 to the 0.76 mark, which has dropped 50 points.
Earlier, the Asia Pacific index continued to rally in the US and Europe last week, which greatly boosted market sentiment.
In addition, the recent rise in the renminbi against the US dollar and the further rise in crude oil constitute the driving force behind the rise of the Australian dollar.
The Aussie dollar initially opened more than 10 points against the US dollar today, and was hit by another weak economic data on China at the weekend.
MSCI Asia Pacific index climbed 1.1%, and the S & P 500 index jumped 1.6% on Friday.
Even the poor performance of China's industrial added value and social retail sales figures at the weekend failed to stop the upward trend of Asia Pacific Index.
Japan's stock market rose nearly 2%, China's Shanghai Composite Index rose nearly 3%, and Australia's benchmark stock index rose 0.4%.
The Aussie dollar rose to its highest level since July 3rd last year, rising 1.65% last week. Last week, the Australian dollar rose by 4.38%, or two weeks, the biggest gain in nearly five years.
The Australian dollar has rebounded 6.3% against the dollar so far this month, the best currency for G10 currencies.
Janu Chan, a senior economist at St George Bank in St Georges, said: "risk appetite has improved. The Australian economy is more resilient than most countries, and I think this is the right thing to do to help the Australian dollar maintain its high position at the moment," said Janu Chan.
Deutsche Bank believes that some of the Australian dollar gains have also been helped by traders' bullish bets on the Australian dollar.
The US Commodity Futures Trading Commission (CFTC) released data on Friday (March 11th) that hedge funds and other big speculators have been bullish for seventh consecutive weeks as traders cut back on the bet that the RBA will cut interest rates again.
Australian dollar
It has been the longest seen since 1994.
Meanwhile, the bullish level of the Australian dollar has been strongest for a year and a half.
CFTC data showed that a hedge fund rose to 29195 of the Australian dollar in the week of March 8th, the strongest in September 9, 2014, after a week of 16861.
At the beginning of this year, the Australian dollar cleared 60000 warehouses.
The options market is now suggesting that traders have reduced the bets of the RBA before the August meeting to 46%, compared with 73% at the beginning of this month.
The Bank of St Georges even expects that the RBA will not cut interest rates again in 2016.
Elias Haddad, foreign exchange strategist at CBA, said that although the Australian dollar trend has been on the upswing in recent weeks, he is skeptical about whether the Aussie dollar will continue to grow significantly this week.
He pointed out that the weekend's weak economic data increased concerns about global economic growth, and the RBA minutes will likely reiterate conditional liberal positions.
On Tuesday, March 15th, the RBA will publish minutes of the meeting. The BOJ and FED will also announce the monetary policy decision in March this week.
In addition, on Thursday (March 17th), the Australian Bureau of statistics will also release February employment data, which will be an important factor affecting the Australian dollar exchange rate trend in the next few days.
Haddad believes that FOMC may downgrade US economic growth and suggest that it will slowly raise interest rates in the future.
Nevertheless, the path of normalization of US federal funds rate will remain intact in the future, which will continue to boost the US dollar index.
Our economists predict that
Federal Reserve
The June meeting will raise interest rates by 25 basis points again, which means that the US US interest rate will not expand, and there will be another factor that supports the Australian dollar against the US dollar.
Haddad also predicts that the Bank of Japan will not stimulate further in tomorrow's meeting.
The total retail sales and industrial growth rates were lower than expected and before, and industrial growth has hit a new low since the financial crisis.
Data show that China's fixed asset investment in 1-2 months was 10.2% compared to the previous year, with a forecast value of 9.5% and a pre value of 10%. The total retail sales of social consumer goods were 10.2%, 10.9%, and 10.7% respectively.
The "reverse" rally of the Australian dollar will test the endurance of the RBA.
If the Australian dollar goes further, it will not rule out the RBA's verbal pressure on the Australian dollar, or even decisiveness.
Reduce interest rate
。
Glenn Stevens, the chairman of the Australian Federal Reserve, has repeatedly stressed that the ideal level of the Australian dollar against the US dollar should be around 0.75, so as to boost domestic demand and exports and help the non mining sector of the economy grow.
In addition, the central bank's policy actions in other major countries are also putting pressure on them.
The Bank of Japan (BOJ) has offered negative interest rates in January 29th, and it is widely expected that the central bank will relax its policy again by July.
The European Central Bank (ECB) also stepped up stimulus last week.
The Philip Lowe, a vice chairman of the RBA, said in a speech last week that the easing of foreign currencies would have an impact on the RBA, and that a looser country would bring downward pressure on its currency, thereby pushing the Australian dollar upward.
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