One of the Big Banks sees that the strong USD will weight on most on the AUD here is why:
- Higher interest rates will push the prices of the commodities down and Australia will be the country that will bear the brunt of this. The lower price of the commodities will put back the opposite correlation as higher dollar, lower commodity prices. It will be negative for all base metals and commodity complex and mining.
- The AUD will suffer the most from the base currencies as at the moment it has most net longs and when these orders are closed then it will fall the most.
- The RBA continue to call for a lower AUD, as this helps their monetary policy for supporting the economy, as with the lower AUD more exports are shipped.