The Australian currency has fallen six US cents steadily in the past 6 weeks. Today, at Noon, the local unit came down to 90.80 cents from 91.23 cents. With the expectation of tapering the economic stimulus in the US, the Australian dollar is taking a hit.
Strength of US dollar
According to ForexCT head researcher, Dooley, it is the strength of the US dollar. It is that strength that is driving down the gold price too. It is also making the US dollar to be traded at a 6 month high against the Yen. He predicts more volatility in the Australian dollar in the next week too. Due to the large amount of economic data, he expects the local currency to fall in the next week. He also says that the Australian dollar is looking at a bearish market.
The firmer bond market
Though the Australian currency is hitting down and the traders are finding some excuse to get rid of the Australian dollar, the bond market is found to be strong and firm. The 10 year futures contract hiked to 95.825 cents from 95.800 cents and the three year bond went up to 3.120% from 3.080%. The interest rate decision of the RBA and the quarterly national accounts of September would have some effect on the GDP data.