FX traders remain wary of the Australian Dollar following RBA Governor Glenn Stevens’ recently published interview in which he states that investors seem to be underestimating the threat of a too strong Aussie Dollar that could, as a result, experience a material decline. Also keeping Aussie trade on the sidelines is the looming economic data from China which will be released on Wednesday and which could provide a better indication of the Chinese economy’s health. As a major trading partner with China, the Australian Dollar is heavily dependent on an economically strong China and any signs that the recovery is slowing could weigh on the currency.
As reported at 12:25 p.m. (JST) in Tokyo, the AUD/USD was trading at $0.9399 near the day’s high and recovering slightly from a session trough of $0.9370. The NZD/USD, also reliant to some extent on Chinese data, was trading higher at $0.8819, near the top of a tight trading band of $0.8809 and $0.8823.
Dollar Trades Looks for Clues from Fed Testimony
In the U.S., Dollar traders are awaiting this week’s Congressional testimony by the Chair of the Federal Reserve, Janet Yellen. Though the central bank has been regularly reducing its monthly asset purchases, it has yet to offer any concrete clues as to the timing of a possible rate hike. Investors are hopeful that the recent upbeat labor data could encourage the FOMC members to pinpoint when a rate hike could occur.