Currencies | Jan 13 2009
By Rudi Filapek-Vandyck
It was only on Friday that TD Waterhouse recommended currency traders should go short the Aussie dollar. Reasons provided for the “short” trade was a sudden spike in investor appetite for more risky assets, such as commodities and commodities-related currencies, but one that was unlikely to last given the significant economic headwinds that were still ahead.
(See also our story “Go Short The Aussie Dollar, Says TD Waterhouse”, FYI, January 9, 2009).
Three days later, the Aussie has been to US$0.72 and back to US$0.6750, and TD Waterhouse believes the time is opportune for taking profit on the trade.
Says Joshua Williamson, Senior Strategist TD Securities: “Since the recommendation was made, the AUD has fallen substantially, weighed down by weaker commodity prices, falling equities and a renewed safe-haven bid for the USD.”
