AUD/USD set to retest $0.9100 level

Having blipped earlier in the month, it has taken two weeks for AUD/USD to mount a serious challenge on this level.

Debate has raged in the ‘will they or won’t they change interest rates’ argument in Australia, and this has helped keep the volatility in this currency cross lively. The flow of data coming out of China has also affected the strength of the Australian dollar; the heavily commodity-orientated economy has fluctuated as the signals coming from the Asian powerhouse continue to point towards a cooling economy.

The other side of the equation is the strength of the US dollar. It’s only a short time before we hear from the Federal Open Market Committee and Federal Reserve chair Janet Yellen, and the perceived value could easily change in the short term. The markets have been factoring in no change for a number of weeks now, but in the last few days there have been a growing number of analysts increasing the chances of a further $10 billion cut in the US debt-purchasing scheme.

The next two hurdles that AUD/USD will have to clear are the March intraday highs and the $0.9170 peaks seen in December 2013.

Spot FX AUD/USD chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.