The Australian dollar came under renewed selling pressure on Tuesday as the consolidation of global imbalances continues to fuel a rally in its US counterpart.
The Aussie dropped briefly to touch a four-year low around $US86.5 cents on weak trade data and an upward revision in unemployment, before recovering to around $US86.9 cents as the market took heart from strong retail sales figures.
However, the main driver of more general weakness is a new surge in the US dollar, spurred by another bout of extreme monetary easing by the Bank of Japan.
The BoJ on Friday caught markets off-guard by announcing a larger-than-expected boost to it quantitative easing program, less than 48 hours after the US Federal Reserve confirmed a halt to its own six-year stimulus scheme. Continue reading