The Australian Dollar is under pressure going into the weekend and in front of next Thursday’s key employment report.
This week’s RBA statement reflected a neutral stance regarding future interest rate policy, but the currency was mentioned as a potential headwind to Australia’s terms of trade should the AUD/USD continue to appreciate.
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The tone of the RBA statement illustrates the bias the central bank has for a weaker AUD/USD as a means to help domestic exporters. In short, the RBA would much rather see the AUD/USD at .7000 than at .8000.
Technically, the AUD/USD has posted a lower high everyday this week after failing to break the .7700 level last Friday. The relative strength indicator (RSI) is rolling over and pointing lower at 60.50, which suggests range extension below .7500 in the near-term.
For investors who want to profit from a lower AUD/USD, the ASX offers two dynamic Exchange Traded Funds (ETFs): the BetaShare USD and the BetaShare YANK.
The USD is an unweighted, inverse unit trust which gains a percentage value tied to the AUD/USD. The YANK is also an inverse unit trust, but has a 2.5% weighting. This means that a 1% drop in the AUD/USD will see a 2.5% increase in the BetaShare YANK ETF.
