Forget Today Ever Happened: Aussie Erases Gains At Open

The Australian dollar rallied against its American counterpart on Wednesday, but reversed trend and depreciated against the dollar Wednesday night. At one point the Aussie was down nearly a full percent against the U.S. dollar. The Australian dollar may have been depreciating on global growth concerns. The U.S. dollar rallied late on Wednesday to reverse a downward trend it had experienced for most of the trading session. Gold retreated from its near $1550 high just minutes before the close and silver fell sharply. Thus, the decline in the Australian dollar may be predicated on external events unrelated to the Australian dollar itself and more aligned with global macro-economic factors. If investors are seeking to weather the storm by fleeing to cash, it may continue to be a bearish environment for the Aussie. Other currencies such as the Korean won and New Zealand dollar may suffer the same fate. The New Zealand dollar has, historically, maintained an extremely strong correlation to the Australian dollar. The New Zealand dollar is presently down against the U.S. dollar as well. However, the U.S. dollar has its own host of issues from bad data on jobs to questions surrounding the federal debt ceiling. Traders may consider this a prime opportunity to take positions in these currencies. CurrenyShares Australian Dollar Trust FXA might offer traders an attractive return if the Aussie resumes appreciating against the dollar.