Wednesday saw the Australian dollar lose value against the monetary units of Japan and the U.S., according to Bloomberg.
The Aussie's two-day rally against the yen and four-day rally against the greenback each closed on Wednesday as concerns grew for the sovereign debt scourge's damaging tendencies in the euro zone. Borrowing expenses were climbing in Spain as the country is set to conduct another bond auction on Thursday.
But one analyst said the Australian dollar is poised to gain should policy makers with the U.S. Federal Reserve issue additional economy-spurring measures. The Federal Open Market Committee is expected to adjourn two days of meetings Wednesday afternoon in Washington.
"The market has built in strong expectations for some sort of policy action from the FOMC," strategist Andrew Salter with Australia & New Zealand Banking Group told the news source. "If we get some sort of flag by the Federal Reserve to additional purchases, then that would be a positive for the Aussie."
The FOMC's adjournment, which will be Thursday morning in Australia, is projected to result in a variation of Operation Twist, according to The Sydney Morning Herald. That would entail the sale of securities that are shorter term and the purchase of bonds that are longer term.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
