AUD/USD is trading at $0.9262, down 0.3%. Traders have been locking in their profits from last week’s rally, triggered when the US jobs report revealed an increase of 192,000, which was slightly below the 200,000 expectation.
The number of short positions on the Australian dollar by non-commercial futures traders, such as hedge funds, has dropped to its lowest level since May 2013. The Reserve Bank of Australia has continually reiterated that the Australian dollar is too high, yet it shows no signs of willingness to lower interest rates, as the recent economic announcements from Australia have been encouraging. China was closed overnight due to a public holiday, and this has led to lower volatility in terms of trading volume and news flow.
The Australian dollar has come off a four-month high versus the US dollar and, as Chris Weston explained, the $0.93 mark is now an important hurdle to clear. The NAB business confidence report will be released overnight, at 2.30am (London time), and if it looks strong we could retest the $0.93 mark, with the 200-hour moving average providing support at $0.9249.