Australian Dollar Continues to Lose Ground on Falling Commodity Prices

AUD-USD is holding a slightly softer tone, reflecting easier commodities with crude falling under $67 after warnings from BP over demand and copper prices down over 2% in Shanghai. Some of the weakness in commodities is attributed to month-end profit-taking but sentiment is also emerging that commodity and commodity currency gains of late have been over optimistic on the global recovery. There are also fears that China’s market may be poised for a correction, after strong gains in the real estate and equity market, and this would also weigh on the AUD. Yesterday, RBA Stevens suggested that Australia may have its own bubble in the real estate market. AUD-USD has retreated from morning highs of 0.8279 to 0.8237 with support at 0.8220, a break of which targets 0.8180.