Wednesday saw the Australian dollar remain high against the world's reserve currency as the Aussie preserved its strength from two consecutive trading sessions of gains, Bloomberg reports.
The Aussie is poised to continue its upward drive as policy makers with the U.S. Federal Reserve convene for the second day of meeting on Wednesday. The Federal Open Market Committee is slated to be followed by a policy meeting convened by the European Central Bank within the next two days.
"The FOMC is likely to acknowledge the weakness in the labor market data since the last meeting and the continued decline in underlying inflation," states a Wednesday note penned by analysts Ajay Rajadhyaksha and Dean Maki with Barclays Capital, according to The Sydney Morning Herald. "Recent FOMC meetings have focused on when to taper asset purchases, but given the recent data, attention may now shift to the potential for further accommodation."
The strength of the Aussie is reflective of the strength of the nation's economy, Australia Treasurer Wayne Swan told a business luncheon in Melbourne on Wednesday.
Linked with commodities, the Australian dollar benefits from efforts to spur economies, such as quantitative easing and interest rate slashes.
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.