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The Australian dollar is still grinding higher

The Australian dollar is still grinding higher

Australia: The Australian dollar edged higher on Friday, continuing to benefit from a softer-than-expected US consumer price inflation report for April released a session earlier.

AUD/USD 0.7544 , 0.0002 , 0.03%
AUD/JPY 82.46 , -0.01 , -0.01%
AUD/CNH 4.7776 , 0.0024 , 0.05%
AUD/EUR 0.6314 , 0.0003 , 0.05%
AUD/GBP 0.5569 , 0.0001 , 0.02%
AUD/NZD 1.0831 , 0.0009 , 0.08%
AUD/CAD 0.9649 , -0.0004 , -0.04%

And here’s the AUD/USD hourly chart showing the price action seen over the past few weeks.

Ray Attrill, Head of FX Strategy at the National Australia Bank, said the prevailing theme of Friday’s session was yet again modest weakness in the greenback, driven in part by signs that short covering in the US dollar may have run its course.

“The US dollar index (DXY) was down 0.1% on Friday and unchanged on the week,” he said in his Monday morning report.

“Friday’s latest CFTC/IMM data on futures positioning showed that net speculative short positions in the USD against other currencies are now barely a third of what they were at their recent peak, suggesting that the USD no longer has the tailwind from position unwinding that was almost certainly a factor behind recent strengthening.”

Attrill said this helped to boost major currencies against the greenback, including the Australian dollar.

“Most currencies were slightly higher against the dollar,” he said. “The exception was the Canadian dollar which suffered on a weaker-than-expected employment reading [for April].”