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Australian Dollar Outlook


04:10 GMT Feb 14 The AUD/USD opened in Asia at 0.8960 after getting hit as low
as 0.8923 during the US session when stops were triggered below 0.8960 in the
wake of stronger than expected US Retail Sales. The AUD/USD attained a bid tone
in early Asia amid scepticism over some of the factors (i.e. Australian bank in
trouble) that led to the AUD losing ground across the board. The AUD/USD was
trading around 0.8975 when the Australian employment data showed a rise of 26.8
K and unemployment falling to an over 30 year low of 4.1%. The AUD/USD jumped
above 0.9000 and eventually traded to 0.9032 before settling around 0.9020.
Volumes were fairly large, as shorts taken on the break below 0.8960 were
covered and fresh buying emerged on expectations rose that the RBA will hike in
March and again in May. The AUD was also boosted by a solid rise in Asian
equities. There was some selling between 0.9020/30 from a number of accounts
after two investment banks gave recommendations yesterday to sell rallies
between 0.9030/50. Sentiment is mixed towards the AUD/USD and a break above
0.9050 is needed to restore upward momentum.