The Australian dollar remains on high levels against the US Dollar today after being lifted on Friday to new month highs of 1.0773.
AUDUSD is trading in a range today as markets in a wait-and-see mode, in anticipation of tomorrow’s Australian central bank meeting that could prove a close call for a hike in interest rates.
The Australian Dollar’s resilience has surprised many investors because usually commodity-linked currencies like the Aussie Dollar do not perform well when the US Dollar is weak and there is uncertainty in markets.
Senior economist at Commonwealth Bank of Australia, Michael Workman, commented that “Usually, when markets are under pressure, you’d see the Aussie lower”.
Workman was surprised that in the wake of another round of poor jobs data from the United States on Friday, the Aussie remains high.
He added that he anticipated the Aussie to break past the official 26-year summit of $1.1012 last month and could hit $1.12 around September. The AUD has gained a staggering 30 percent in the past 12 months.
“We are still part of the Asian story and Asia is where growth is going to be in the next couple of years and where it has been in the last few,” Workman said.
The Australian dollar was well-bid in the Asian session on some speculation the Reserve Bank of Australia (RBA) may surprise markets by increasing interest rates when it meets on Tuesday.
The RBA is largely expected to keep its 4.75 percent rate on hold, with markets pricing in only around a 15 percent chance of a rise this week , but some say it will be a much closer call. A Reuters poll of 23 analysts found five thought the RBA would want to act quickly to head off future inflationary pressure amid the biggest mining boom on record.