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 (
The Reserve Bank of Australia (
) 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.