The USD lost ground to the majors with the exception of the AUD, which has been in focus on the back of iron ore and a raft of releases from China. AUD/USD has been tracking iron ore and has managed to bounce over the past 24 hours.
With iron ore trading back above $50/t, some confidence has returned to the local currency but the vulnerability is still very much in play. A lot hinged on China’s data today, and of course the jobs numbers out tomorrow.
The pair is currently just hanging on to $0.7600 and further volatility is likely on the way. Needless to say the market broadly expects further AUD weakness.
While it is tempting to sell at current levels, I feel waiting for a bounce is the best value proposition on the AUD. The current momentum in iron ore prices could take the pair a bit higher in the near term and I would then look at selling into that strength.