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The Australian dollar has been among the more solid developed markets currencies this year. That status has lifted the Guggenheim CurrencyShares Australian (NYSE: FXA) to a gain of 2.4 percent.

'With All Her Faults We Love Her Still, Britannia Rules The Wave'

The driving forces behind the Aussie's strength this year are easy to spot. Obviously, rebounding commodities prices are playing a part. Additionally, speculation that the Reserve Bank of Australia (RBA) is done lowering interest rates is propping up FXA and the Aussie. That point is particularly important because although Australia's current benchmark interest rate is high relative to the rest of the developed world, over the past several years, RBA has conducted a scorched earth campaign when it comes to lowering rates.

In the wake of last week's stunning Brexit outcome, it is worth remembering that the RBA has previously respond to global macro shocks, even the ones that do not directly affect Australia, with rate cuts. Enter the ProShares UltraShort Australian Dollar ETF (ProShares Trust II (NYSE: CROC)) as speculation intensifies that the RBA could cut rates again at its August meeting.

Related Link: Post-Brexit Analysis Shows Many ETFs Did Their Jobs

The Aussie And Her Ratings

“While the swaps market had previously been pricing in less than one-in-two chance that the Reserve Bank of Australia would ease again before the governor steps down on Sept. 17, the market on Friday in Sydney showed a more than 60 percent probability that he would lower the cash rate in August from an already record low 1.75 percent,” according to Bloomberg.

Australia's benchmark cash rate is currently a record low of 1.75 percent. During the global financial crisis, rates there were as high as 6 percent. RBA actually defied developed markets central banks “conventional wisdom” by raising rates in 2010 and 2011, but since the latter stages of 2011, Australian borrowing costs have been in a steady downward trajectory.

Although its interest rates and dollar have steadily been declining, Australia retains its AAA credit rating. At least in the eyes of Fitch Ratings, which recently reaffirmed Australia, the world's 12th-largest economy at AAA.

“Swaps traders on Monday were pricing in a 33 percent chance of a cut as soon as next month, with the odds climbing to 55 percent for August and 60 percent for September. That compares with respective probabilities of 20 percent, 38 percent and 45 percent on Thursday,” reported Bloomberg.

CROC is designed to deliver double the daily inverse performance of the Aussie against the U.S. dollar.

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