As we know, the Aussies love a sale and that’s exactly what we are seeing at the moment. Thanksgiving week often means the end of the trading year for many of the big FX players, hedge funds and CTAs, and as they have built up big AUD long positions over the course of 2011, now is the time to bail out. We can expect the selling to go for the next few sessions, especially on the crosses (EUR/AUD in particular).
Corporates and ACBs have been noted buyers on dips but the amounts are relatively small. China has been a notable absentee from the FX market in recent weeks. Dealers tell me that 1.0000 should now be toppy and they wouldn’t be surprised to see a test of .9400 again over the coming weeks, especially when trading conditions get more volatile.
