Aussie performance in forex trading

Even thought the Aussie is rallying in forex trading (despite the risk aversion present), there are concerns that the rally could come to an abrupt end if the Reserve Bank of Australia decides to halt its rate hikes.

Australia is in a bit of a delicate position right now, with its strong economic growth, but concerned about the more sluggish prospects of the wider global economy. GFT's Boris Schlossberg reports in FX360 on the RBA's position:

Australian fiscal officials also adopted a relatively cautious tone, with Treasurer Wayne Swan noting that inflation pressures “remain subdued.” Australian policymakers must balance the strong domestic recovery against the much more lackluster rebound in global demand.

China could help solve the balance problem, though. The country is limiting its lending in an effort to slow its growth, and that may result in a slowing for the Australian economy as well.

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