ASIC to Probe Spike in AUD

The Australian Securities and Investments Commission (ASIC) declared in a statement it will investigate market trades as the AUD was trading at US76.99 cents after adding up another one percent.

This is prior to the monetary policy decision of the Reserve Bank of Australia.

The Commission is also looking into FOREX movements just before the RBA released its statements in February and March of this year.

It appears that FOREX again anticipated the RBA’s decision with the AUD going up just before the central bank’s declaration pre-empting the policy meeting’s outcome and prompting scrutiny of ASIC.

The RBA claimed additional cuts were possible and rates may be reduced in May.

The rally of the Australian currency defied the RBA’s formal easing partiality. Compounding the central banks uneasiness with the AUD is proof that the US went through a difficult first-quarter that means the US Fed will stick to zero longer. ANZ currency strategists emphasized the currency only got along with a mid- limit value due to negative US payrolls data and the RBA’s on-hold verdict.

In view of the Reserve Bank of India's judgment to maintain rates at 7.5 percent on the same date, central banks appear headed toward interest rate stability before the Fed decision. Meanwhile, possibility of parity versus the NZD was left out temporarily after the pair was 21 basis points short of being even right before the RBA move.

Strategists do not put the same emphasis on the connotation of headline events like currency parity or crucial trading levels.