Dollar Headed Towards $1.10 US
The Australian Dollar continues to rise because money market expectations about interest rate cuts continue to fade. The 90 day bank bill market believes the RBAs rhetoric about being at an appropriate neutral setting. Its pretty clear the downtrend in the 90 day bank bill yield has broken and the next response to this will be the AUD breaking the 110usc mark, helped along by the fact the RBA has basically told currency speculators they won intervene to stop the currencies orderly appreciation. The RBA, with a little help from the FED and ECB, has basically waved the green light to the currency speculators.