2016-11-25 11:58:21

Overbought level of the USD and the rise in commodity prices provoked the closure of the short positions on the commodity currencies against the USD, despite the decrease in oil prices.

This week, futures for the iron ore and coking coal have increased by 16.5% and 5.5%, respectively. These products, along with liquefied gas, remain one of the major items of Australian export. The rise in commodity prices provides support to the AUD.

The rise in commodity prices leads to the improvements in the external trade of Australia and foreign trade balance, which has positive impact on the economy of Australia and national currency.

However, in the few coming months, the Australian dollar may be under pressure caused by foreign trade problems between China and the United States. As you know, new US President, Donald Trump decided to raise import duty on Chinese goods. China threatened to take the same measures.

Meanwhile, the rise in the USD will apparently continue, which will have a negative impact on the pair AUD/USD.

The rise in the USD is also supported by expectations that Donald Trump will increase public expenditures and reduce taxes, which will spur inflation and economic growth in the country.

Market participants are focused on the prospects of the US interest rate. Most investors expect that the key interest rate will be raised next month. According to the futures for the Fed rate, probability of monetary policy tightening in December is 94%-96%. Trump also suggests to lift restrictions on oil production in the USA, which will contribute to the further decline in commodity prices, including oil, coal and natural gas, which are the main export items of Australia.

However, today the pair AUD/USD is growing. Note that it is a short day in the USA today. Investors may take profit at the beginning of the American session.

The main news, which will affect movement direction will be released at 17:45 (GMT+3). This is the index of business activity in the services sector and the composite index of business activity in the United States. (Markit PMI for November). Forecast for PMI in the service sector is 54.8.AUD/USD: the pair was supported by the rise in commodity prices.  Fundamental analysis for 25/11/2016