Nothing like a little bit of dour honesty to sober up markets. The Australian dollar is rapidly heading for a test of it 2013 low at 88.47 with a low overnight of 88.8:
The ebbs and flows of the evening matched other taper-tracking markets with gold down over one percent and the US dollar up marginally but a glance at the crosses suggests that something else was playing a role:
Virtually all red leading me to conclude that the starkly weak MYEFO was a participating factor.
I’ve included the Commitment of Traders report in the above chart to show that we’re certainly moving to an oversold position. But there is still room to go lower for the large and small speculators that drive the market. Captain Glenn should have a some more jawboning tricks up his sleeve today when he appears in Parliament.
Whether we take out this year’s low or snap back for a while will probably depend upon the outcome of tomorrow’s FOMC announcement vis-a-vis taper.
