USD Trading Outlook (22-04-2013)

Falling metal prices ensured that the AUD gave back all of its intraday gains on Friday and finished the week on a bearish note. The fact that a recovery in precious metal and equity markets could not help the AUD to sustain any gains shows just how much market sentiment towards the Aussie is shifting.

The G20 avoided any overt criticism of Japanese policy toward the Yen and these comments maintained the bearish tone in the JPY, although market positioning remains very short so I do not expect any more sharp falls in its value in the short-term. ECB comments regarding the effectiveness of any further interest rate cuts helped the EUR to rally on the crosses, especially against the JPY, GBP and AUD.