The Aussie is a currency that has become a favored vehicle of traders in recent years. After a multi-decade commodity boom brought the Australian Dollar to all-time highs against the US Dollar, traders were often attracted by the interest rate differential in the pairing. This allowed traders to earn rollover for being long AUD/USD, while also benefitting from a massive bull run seen in the pair. Of recent, tides have appeared to change as economic difficulties in China coupled with bear markets in metals and many commodities, have created a more opaque picture of the future of Australia's financial prospects.
AUD/USD may struggle to hold its ground over the next 24-hours should the 2Q CPI report highlight a fresh record-low reading for the core rate of inflation.