Australian Dollar is trading as the strongest major currency for the time being while Dollar is broadly pressured. Reactions to RBA rate decision were muted. Instead, there are two other factor that’s driving the Aussie higher.
Firstly, Chinese stocks appear to be having some solid buying for rebound. The Shanghai SSE is trading up 2.74% at the time of writing, at 2779.37. It breached 2700 handle to 2692.32 yesterday. Now a focus will be on whether SSE could close above yesterday’s high at 2760.47, which signals further stabilization. The development also came as USD/CNH (offshore Yuan) dips to 6.846 and looks like it’s heading back to 6.82 handle. It’s also a reason for Dollar’s broad based weakness.
Secondly, AUD/NZD has powered through 1.0991 resistance to resume the up trend from 1.0486. We see that as mainly a result of weakness in the New Zealand Dollar. And the surge in AUD/NZD helps Australian Dollar gains elsewhere. AUD/NZD is now heading to 100% projection of 1.0486 to 1.0960 from 1.0656 at 1.1130.
Meanwhile, it should be noted that AUD/USD is still staying in consolidation from 0.7309 despite today’s rebound. There is nothing to cheer about for Aussie bulls yet..