Daily FNArena News - Currencies

A faster than expected rate of appreciation in the Australian dollar against its US counterpart has seen CBA bring forward its forecasts for the currency.

According to CIBC World Markets an improving global growth outlook has driven commodity currencies higher but any shortfall in growth could see a bounce in the US dollar.

President Obama’s delegation is currently in talks with China’s team in Washington about politics, climate and economics. Oh to be a fly on the wall.

Silicon Valley Bank observes the correlation between oil prices and currencies has broken down, leaving the US dollar as a beneficiary if a double-dip recession eventuates.

The Australian dollar is overvalued against the US dollar on both fundamental and tactical grounds, so TD Securities has gone short.

Research shows the currencies of the major copper producing nations reflect copper prices and this offers FX market opportunities.

China has taken the first step towards allowing foreign cross-border flows of its currency. A first step towards a new global reserve currency?

Weak economic data leads TD Securities to suggest the Reserve Bank of New Zealand will again cut interest rates, a move it expects will see the currency fall by 5-10%.

The US dollar has long been the world’s reserve currency but with the US economy now weak there is little to support a sustained continuation of this trend.

Both National Australia Bank and TD Securities suggest the Australian dollar is overvalued at present and so could move lower in coming weeks.