USD Trading Outlook (22-08-2014)

AUD/USD recovered along with a generally softening of the USD after the Asian grab-a-thon in response to the hawkish turn in the latest issue of Fed meeting minutes. The US fixed income markets are expecting Ms Yellen’s speech at Jackson Hole to be more dovish than the committee’s view, which led to some paring of long USD positioning in the NorAm session. The Aussie-US rate differential continues to be fairly stable and thus the Oz is not attracting much attention as some of the other major currency pairs, which offer better trading opportunities. And until the AUDUSD can get legs away from .9300, that will probably continue to be the case.