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MENAFN- Daily Forex)
The Australian dollar rallied a bit during the early part of the trading session on Thursday as traders continue to look at this through the prism of a market that is arguing the interest rate differential, with the US dollar drifting a little bit lower in value as interest rates fell on Thursday. That being said, this is a market that also has to deal with the non-farm payroll numbers coming out of the United States on Friday.
That obviously will have a major influence on what happens in the next few days, as a lot of people will be looking to see whether or not the interest rates continue to favor the United States, or if it is a situation where we have to look at this as a market that is just simply stuck in a range.
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The AUD/USD pair has been hanging around the 0.7150 level for some time, an area that has been very important.
Ultimately, I do think this is a market that will have to make some type of longer-term decision, and it will be noisy due to the fact that the Americans may have to keep interest rates higher than expected, but at the same time you would have to assume that traders are going to be looking at this with the possibility of commodity strength driving the Australian dollar higher.
All things being equal, I think this is a scenario where we are going to continue to see a lot of back-and-forth choppy behavior, and if you are a short-term trader, this might be the way going forward. Otherwise, if you are looking for a bigger move, you are just simply going to be stuck with your eye on interest rates in America and of course headlines coming out of the Middle East, which could have a major influence on risk appetite and the idea of whether or not the energy inflation could cool off. As things stand right now, I suspect this is a situation where traders are just simply looking for some type of clarity.
EURUSD Chart by TradingView
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