Frankly, it is not surprising that the bulls on Aussie tend to leave the game in the first days of trading this week after the currency reached record highs for four consecutive days last week. On the one hand, Kerry trade becomes very congested. According to the CFTC, longs for the Aussie reached a 18-year high on April 5, so strong was the optimism in relation to the currency. Pair AUD / JPY, which is the main beneficiary of the Kerry-Trade, jumped an impressive 16% in just three weeks to last Friday, as a result, the majority of positions filled fell on this currency pair.Fleeting fall in the Australian dollar exacerbated the numerous stops, caused by renewed demand for safe foreign currency (Japanese yen, Swiss franc). The latter helped the recognition of the Japanese minister of economy that the impact of disasters will be stronger than previously estimated. Aussie stumbled because of falling commodity prices, such as WTI fell at 4 dollars this week. Aussie sellers have been provoked by comments of the head of Treasury at night Swan, who suggested that a strong currency - is a burden for some parts of the economy. The IMF has lowered growth estimates for the Australian economy this year to 3%, compared with the previous estimate of 3.5%, mainly due to the impact of devastating floods.
If we see a further decline in risk appetite in the coming days, Aussie will suffer further.
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