Australian Dollar (FXA) Moves Higher Despite Soft PPI

The Australian Dollar (AUD) rallied against the falling US Dollar (USD) and other major currencies during the first trading day of the week as investors felt confident again to buy higher yielding riskier assets, sending equities and most of the commodities higher as well. Despite today's weaker than expected Australian producer price index for the fourth quarter, the Australian currency still moved higher as the outlook on the economy remains very strong and more interest rate hikes are expected by the Australian monetary authorities in upcoming months. That makes already higher yielding currency even more attractive, especially against its counterparts where the interest rates are still very low, such as the US Dollar (USD). The AUD/USD currency pair jumped for more than 100 pips today, briefly trading above the parity level, although it retreated back later and currently is trading at 0.9970s. The Australian Dollar jumped against the Japanese Yen (JPY) and the Euro (EUR) also, as the AUD/JPY moved from 81.80 to 82.40s, while the EUR/AUD fell from 1.3780s all the way to 1.3640 intraday lows, before recovering a little to trade at 1.3670s. Now all the attention turns to tonight's release of the Australian consumer price index, which is forecasted to gain 3.0% and is one of the most important indicators when the RBA makes a decision on a rate hike.