Money 2 charts that explain why the Aussie dollar remains in high demand

08:20  13 october  2017
08:20  13 october  2017 Source:   Business Insider Australia

The Australian dollar is under pressure following August's terrible retail sales report

  The Australian dollar is under pressure following August's terrible retail sales report The Australian dollar is under pressure following the release of a terrible Australian retail sales report.The AUD/USD currently trade at .7831, down 0.41% from Wednesday's closing level. It briefly fell to as low of .7865 earlier in the session.

Seemingly, despite those headwinds and stretched long positioning from speculators, the Aussie still remains in strong demand , comfortably sitting above the 78 cent level today against the US dollar . These two charts from Tim Baker, strategist at Deutsche Bank, go some way to explaining why the

Seemingly, despite those headwinds and stretched long positioning from speculators, the Aussie still remains in strong demand , comfortably sitting above the 78 cent level today against the US dollar . These two charts from Tim Baker, strategist at Deutsche Bank, go some way to explaining why the

  2 charts that explain why the Aussie dollar remains in high demand © Provided by Business Insider Inc While off the highs seen earlier this year, the Australian dollar remains well supported at present on even the smallest pullback.

It's looking resilient despite a sharp drop in iron ore prices, Australia's largest goods export by dollar value, along with recent weakness in retail sales which has raised concerns about the outlook for household spending, the largest part of the Australian economy.

Seemingly, despite those headwinds and stretched long positioning from speculators, the Aussie still remains in strong demand, comfortably sitting above the 78 cent level today against the US dollar.

AUSTRALIAN STOCKS GO NOWHERE: Here's what you need to know

  AUSTRALIAN STOCKS GO NOWHERE: Here's what you need to know Australian stocks finished flat in a relatively quiet session, falling into the close after opening higher. Here’s today’s scoreboard. ASX 200. 5,738.10 -1.16 (-0.02%)Australian stocks finished flat in a relatively quiet session, falling into the close after opening higher.

So at week’s end, the Aussie dollar is holding just above 93 cents against the US dollar . Perhaps these two charts from the ANZ of the EPFR fund flow data, showing that capital flows have been It’s not the whole story for Aussie strength but it certainly explains some of the recent buying.

These two charts from Tim Baker, strategist at Deutsche Bank, go some way to explaining why the Aussie continues to find buyers.

The first shows movements in the AUD/USD versus pricing for the RBA cash rate looking 12 months ahead.

  2 charts that explain why the Aussie dollar remains in high demand © Provided by Business Insider Inc Even with a recent pullback, the expectation that the RBA will start to lift interest rates next year has clearly bolstered the Aussie.

The second chart is also telling, showing the relationship between the AUD/USD and the performance of emerging market stocks compared to those in developed markets.

  2 charts that explain why the Aussie dollar remains in high demand © Provided by Business Insider Inc Baker says that the outperformance of emerging market stocks this year has been a major factor that's underpinned the Aussie's rally.

While the iron ore price has dropped, global growth and emerging market equities by extension have supported the AUD," he says. "AUD tends to do well when emerging market outperforms developed market [stocks]."

Looking ahead, Baker says that the AUD/USD's recent move back above 78 cents is likely to be sustained in the near-term, although he thinks that there are downside risks for the Aussie against emerging market currencies.

"Our Blueprint trade is short AUD vs a basket of the Colombian peso, Indonesian rupiah, Mexican peso and Russian ruble," he says, adding that the Aussie looks quite stretched versus these currencies given where commodity prices currently sit.

Scary high-speed smash at Surfer's .
Wet weather caused chaos in Aussie Racing Cars on the iconic Surfer's Paradise strip with one car losing its entire back end in a high-speed smash.Before the V8 Supercars hit the Gold Coast circuit for qualifying, the Aussie Racing Cars battled in the slippery conditions.

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