AUD/USD Ignoring RBA - Rallies to be Sold -Christopher Vecchio, Currency Analyst at DailyFX
"Higher yielding currencies are moving higher on the day although the same cannot be said about risky assets in general. US equity futures are slightly lower on the day and US yields are rather mixed. ‘Mixed' would also be the best way to describe the US Dollar's performance over the past several days, it having moved in an approximate 0.7% trading band since November 21.The main push against the US Dollar today comes not from European FX (although they remain in the thick of things) but rather from the Tokyo session currencies. Of note, the Australian Dollar, after diving back to last week's lows under $0.9060, has rebounded across the board in tandem with the New Zealand Dollar. The Reserve Bank of Australia kept its main refinancing rate on hold at 2.50% last night, and traders have thus far shrugged off commentary that the Aussie remains overvalued.With perhaps a bit of short covering occurring in the commodity currencies after several days of weakness, a backdrop of steady or weakening US yields today or tomorrow might afford a bit of upside in the AUDUSD the next few days. While we remain bearish on the AUDUSD (given general upside pressure on US yields past week, month, and quarter), a rebound today could offer an opportunity to resell the currency higher towards 0.9280 ahead of NFPs on Friday."