Why I Like the Australian Dollar
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By Marc Chandler
NEW YORK (BBH FX Strategy) -- The Australian dollar held support in the middle of last week, near $1.04. Yield-hungry Japanese retail and institutional investors have taken a new look, especially as they begin trying to diversify away from the Brazilian cash register. There is still scope for another rate cut from the Reserve Bank of Australia, possibly in May, but this has largely been priced in.
Consider what has happened in the past five days. The Australian 2-year yield has risen 25 bp, compared with a 5-bp increase in the U.S. and no change in the Japanese 2-year rate.
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