But ... remain alert!
The Australian dollar (Currency:AUD) has been boosted against the US dollar by an improvement in the performance of commodity prices. Gold prices are currently 1.64 pct higher on a day-to-day basis at 1317 USD/Oz.
We see the Australian dollar has moved higher, alongside the New Zealand dollar and South African Rand, against the US dollar as a result. However, the commodity currencies remain mixed against a firm GBP.
China’s move to scrap rule that limits bank lending gave some support
Driving the South African Rand and Australian dollar today are occurrences in the commodity markets, which have their origins in China.
"China has eased lending restrictions, which has unsurprisingly been taken as positive news for the AUD and other riskier assets. Any move that could revive Chinese growth will benefit the AUD," says Richard Driver at CaxtonFX, "focus will be on tomorrow night’s Australian quarterly CPI update and Chinese manufacturing number. For now, this pair trades at 1.66."
Gold prices head higher
Gold prices are up, the US dollar is down, affording the Australian dollar some relief. However, traders have been urged to remain cautious.
Sean Lee at FXWW says:
"If you’re tempted to sell the Gold stuff, then keep your stops fairly tight above $1325 as it certainly feels as if something major is about to happen in the commodity markets. News of the Fed review followed closely by this front-page article in The NY Times should ensure that commodity markets stay in the headlines for a few days to come."
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Murray Math analysis suggests declines to 0.87
Be aware however that the Australian dollar could well be in for further weakness.
An analysis of AUD-USD Murray Math Lines points to the potential for a decline to the 0.87 area.
RoboForex, in a morning alert to clients, say:
"Australian Dollar rebounded from the daily Super Trend twice; the bears were also supported by the 4/8 level. If the market is able to keep the price below the 3/8 level, the pair will continue falling down towards the 0/8 one."
New Zealand dollar
The New Zealand dollar (Currency:NZD) is not benefiting from today's conditions to the extent that AUD is.
Nevertheless, GBP-NZD continues to trade sideways despite news of NZ earthquake.
"There was some positive news from Japan as PM Abe’s ruling coalition won majorities in both the lower and upper house, thus giving the platform of political stability upon which reforms can be passed. Domestic NZ news was rather more concerning however, as an earthquake got nerves jangling again (though the NZD emerged unscathed)," says Driver.
GBP/NZD is once again trading around the 1.93 level and another move lower looks likely suggests Driver.