The Australian dollar is nearing the February low of 0.6443 as it rests just 14 pips above. AUD/USD traded as high as 0.6644 on Tuesday but traded down sharply on the hot US CPI report and has continued lower today as the dollar breaks higher against a number of currencies.
Though much of the move is broad USD strength, the Australian dollar is particularly soft accounting to broader risk aversion. It’s not benefiting from higher metals prices and improving China growth prospects but those are notable themes to watch.
Ominously, both CAD and NZD are trading at the lowest levels since November. The commodity-driven trio tend to trade together so it may be a struggle for AUD to hold the Feb low. If it breaks, the November low was 0.6339 and the October low was 0.6270.
This article was written by Adam Button at www.forexlive.com.
