Thee Australian Dollar has exhibited recent strength against the US Dollar. We believe the AUD$ is a major pair where the USD$ could strengthen.
The Aussie Dollar has exhibited recent strength due to the rally of commodity prices, however, this strength may only be temporary. What Forex traders may be missing is that Y/Y mining production has steadily been declining since peaking in the middle of 2014. This will translate to capital flows recorded in the Balance of Payments.
Australia's velocity of money has exhibited a declining trend, which will structurally pressure on the AUD$ long-term. Not probable that the Bank of Australia raises rates in this environment - - especially with non-financial private credit ~290% of GDP.
Here at Quantamize, we expect real rate differentials to favor the USD$ vs AUD$.
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