AUD/USD has diverged from commodity prices - CIBC
|Analysts at CIBC, point out that there is a new driver in AUD/USD, but the same direction. According to them, the pair has diverged from commodity prices and is now more influenced by interest rate spreads.
Key Quotes:
“In recent years the primary driver of the Aussie dollar has changed from commodity prices to interest rate spreads, but the general direction the currency was travelling remained the same – down. That could be due to the fact that it has been supply, rather than demand, issues that have been largely propping up prices for its key commodities. However, going forwards the Aussie could do a U-turn and see an appreciation.”
“Interest rates are already very low, suggesting little further room for spreads to move more in favour of the US. Meanwhile an improvement in global sentiment could be positive for commodity prices for the right reason: higher demand rather than limited supply.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.