Aussie Slumps to 4-Day Low vs. USD

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The Australian dollar (AUD) remains bullish in spite of monetary tightening in China. However, the concerns that restricted bank requirements for Chinese banks would impact its Pacific neighbors initially drove the Aussie to a 4-day low against the US dollar ( USD ).

The Reserve Bank of Australia ( RBA ) will publish minutes from its April 5 policy meeting tomorrow but few investors expect any surprises given the nation's steady path of solid growth. Potential for a monetary policy tightening from the RBA has been speculated, but few expect such a move at this time, nor from its upcoming May 3 policy meeting.

Australia's commodity-linked currency values also add explanatory weight to the AUD's resistance to bearishness. The market uncertainty brought on by S&P's downgrade of its US long-term outlook piled weight atop global stock markets, pushing many investors into the safety of physical assets like Gold, Silver and Crude Oil. Gold's rise towards $1500 per troy ounce means Australia's metal export market should be gaining in significant value, helping to support AUD values.

Traders should expect to see a continuation of the AUD's bull run, regardless, it seems, of Chinese monetary policy moves and heightened bank restrictions on loans. The Aussie appears one of the safer investments in the forex market, also despite a recent 4-day low reached against one of its primary rivals, the USD.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

Referenced Stocks: RBA , USD

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