Forex: AUD/USD – Trading higher in American session

on Jun 19, 2013

The pair rebounded from its daily lows at 94.33, reached in Asian session. In European mid-day the quote was trading higher at 0.9518. Despite losing momentum for a while, the upside trend has continued and the AUD/USD has started to rise again, currently to 0.9510.

With the Fed’s position on continuing the present pace of asset purchases strongly linked to the economy’ general health, the market has remained focused on recent US data announcement, which have principally been exceeding early estimates. This positive US outlook has increased the possibility that the Fed might announce concrete plans for future reductions in asset purchases.

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As officials stated in December last year, interest rates will remain near zero, at least until the unemployment rate hits 6.5 percent or inflation reaches 2.5 percent. Chairman Bernanke said last month that the Fed would keep pumping money into the recovery until there was “substantial improvement” in the job market. The US unemployment rate was 7.6 percent last month.

The combination between weak economic releases out of China and strong US data demolished the AUD/USD down from its 1.03/1.04 trading zone in April to 0.95/0.96 in May, a loss of around 8 percent.
The Reserve Bank of Australia has supported this downside trend, surprising the market with a record low interest rate at 2.75 percent. Traders and analysts are betting there will be more rate cuts in near future.


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