Forex: Aussie lower, trades around $1.0100

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Forex: Aussie lower, trades around $1.0100

FITITOL--> FXstreet.com (San Francisco) - The Australian dollar is extending its downtrend of more than two months fueled by compelling bearish news.

At the time of writing, AUD/USD is holding around the 1.0100 mark, just above yesterday’s 5-month low at 1.0087 after shedding 0.7% to 1.0119 from 1.0195 overnight.

Treasurer Wayne Swan said the surplus will “continue to give the Reserve Bank (of Australia) room to cut interest rates,” like it did last week when the RBA slashed rates by 50 basis points. This sentiment is weighing on AUD.

“With the Aussie dollar still above parity against the US dollar, the economy slowing and inflation under control, there appears to be little stopping the RBA from continuing to bring down rates,” says Steven Cox, CMT at Dow Jones Newswires.

Technically speaking, a counter-trend rally may be brewing according to Jamie Saettele, CMT, Sr. Technical Strategist at DailyFX: “1.0044 and 0.9861 remain targets for the month but I am lightening up on short positions now in anticipation of strength above 1.0225. As mentioned yesterday, ‘price could reach the 1.0300s and still be in a strong downtrend’.”