Australian Dollar

The AUD had another strong week - albeit primarily against the embattled USD - posting fresh 2009 highs. The surge in equity prices via “the recession is over” from Fed Chairman Ben Bernanke, surging commodity prices, and ongoing talk of Australia leading the interest tightening cycle well ahead of its OECD peers are largely responsible. AUD currently stands at $US0.8740 convincingly broke through the $US0.8650 resistance level, after a few failed attempts in recent weeks, and is revisiting levels not seen since late August 2008.
While some are more cautious on the outlook for the global and local economies, Australia’s relative economic outperformance cannot be denied.
It is also very important to note that, in stark contrast to the central banks of Canada and New Zealand, there is rarely any comment – positive or negative - on the strength of the AUD. While RBNZ Governor Bollard frequently despairs at the NZD trading well above “fundamentals” there is never any such sentiment aired by the Australian central bank.
Looking ahead, the cupboard is bare on the data and event front, so guidance will be via the performance of commodity prices and equity markets.