Australian Dollar Trading Close to the Lowest Level since 2011 against USD

The Australian Dollar, the major currency traded 0.6% from the lowest level since 2011 after US data forecast showed that consumer confidence has improved. Apart from that, manufacturing industry of US showed advancements too. However, there are speculations that the Federal Reserve may slow down the stimulus process.

The 1-month volatility of the Australian Dollar against USD was close to the highest value of the same since June. Australian Dollar rebounded against Yen, snapping decline of the last 4 days. Technical indicators are currently signaling that the recent losses were pretty much excessive in nature. The overall demand for the New Zealand and Australian currencies was limited on chances that the slowdown of Chinese output will be curbing the exports of these South Pacific countries.

According to Janu Chan, an economist at St. George Bank Ltd., it will be interesting to see if the expectations will continue for the Federal Reserve to wind down the quantitative easing. Chan added that for China, there is some sort of uncertainty. The Chinese data released on this week will probably increase the chance of Reserve Bank of Australia cutting soon. Chan thinks that Australian Dollar, popularly known as Aussie may experience further fall.

On today, the Australian Dollar was more or less unchanged against USD as it is priced at 96.40 US Cents now. On yesterday, it was at 96.34 US Cents. The 1-month implied volatility is at 11.160% now, from yesterday’s value of 11.255%. Against Yen, Aussie has surged ahead by 1% and it is currently at 98.23 Yen. In the previous 4 sessions, Aussie has declined by 3.2%. When it comes to the New Zealand Dollar, also known as Kiwi, it was unchanged against USD at 80.85 US Cents. Against Yen, Kiwi went ahead by 1% and is currently at 82.39 Yen.

The 10-year bond yield of Australia increased by 5 basis points and it is currently at 3.32%. The 2-year swap rate of New Zealand surged ahead by 4 basis points and the same is now at 2.95%. Incidentally, swap rate is a fixed payment made for receiving a flowing rate.

The 14-day relative strength index of the Australian Dollar against Yen declined to 30.7 on yesterday. Incidentally, level 30 denotes that an asset’s price has fallen too fast and may be poised to take reverse course.