Forex Flash: Aussie rallying with a strong global growth? Not anymore – TDS

According to Singapore based analyst at TD Securities Alvin Pontoh: “From around the time when the ECB announced the OMT last September (fulfilling Draghi’s promise to do “whatever it takes” to save the euro), the Aussie dollar’s correlation with US growth indicators began to turn negative,” Alvin notes, adding: “That is to say, positive growth surprises out of the US — still the world’s largest and most important economy — was met by lower, not higher AUD, as the USD reverted to its historical role as a 'growth currency,'” he concludes.

From Alvin: “The upshot is that, barring material negative shocks in the US economic data flow (with payrolls tomorrow key), we expect the recent softness in AUD/USD to persist near term.”