Aussie Dollar Hits Eight Week Highs

Interesting to see the Aussie dollar reach eight week highs. This comes on the back of worsening sentiment for the US dollar. Traders expect the road to 80 cents will be rough. Former Federal Reserve chairman Alan Greenspan made comments via satellite link to a Hong Kong conference that it was possible that the US economy could fall into recession in late 2007 adding to the bearish drive in the US dollar. The road to 80 cents will be rough because it is a strong psychological barrier, a barrier previously reached in February 2004 but not broken since March 1997. Keep in mind that the RBA commented that interest rates are likely to remain on hold due to an improvement in the inflationary outlook, the local currency remains well supported. Meanwhile, it looks like the Aussie forex markets have continued to price zero chance of a quarter percentage rise in the interest rates in the next RBA board meeting.