Aside from the Aussie dollar seemingly sitting on a 2+ year long bull trend support line, we believe any negative economic news out of Australia has likely been priced into the market.  On top of this, the Reserve Bank of Australia may be set to raise interest rates at the August meeting based on the observation by the RBA that the “rate of wage growth appears to have troughed”.  The RBA has tied its inflation forecasts very tightly to the rate of change in jobs growth and wage growth, and with the aforementioned statement regarding wages, we believe a rate hike will happen sometime in the back half of 2018.  On the other side of the trade is the US dollar, which has been trapped in a bearish to sideways trend in recent months.  As always, we’ll continue to monitor Australian inflation and jobs data in coming weeks and months as they still may not be entirely out of the woods, but I will say my interest is piqued in the Aussie Dollar. 

Australian Dollar Weekly Chart