The Australian dollar has bounced back today on the back of rising commodity prices with some starting to predict that the recent slide in the currency maybe over. At 7.53pm (GMT) the Aussie dollar was trading at US73.82c up from US73.62c in yesterday’s trade.
In earlier trading today, the Australian dollar found strong resistance at the US73c mark as bargain hunters and yield chasers stepped in.
In fact if we look at the Australian dollar the yield against most major currencies is significantly higher which may limit further downside.
“There’s a real interest rate argument to justify the resilience of the Aussie dollar,” said Ray Attrill, co-head of currency strategy at National Australia Bank Ltd. in Sydney.
“If you think real interest rates ultimately matter more than nominal rates -- which does seem to be the case -- then this is of some relevance to the Australian dollar given that much of the rest of the world currently has negative real rates.” he added.
With a lack of economic data due out tomorrow the Aussie dollar is likely to experience volatility on Friday with the release of retail sales numbers from the US, which many see is closely connected with a rate hike from the US Federal Reserve.
