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  • Aussie consolidates modest gains versus US dollar on a quiet session.  
  • Low volatility likely to continue ahead of US holidays.

The AUD/USD pair rose to 0.6790 during the America session and as of writing trades at 0.6785, steady consolidating a modest daily gain of ten pips. A decline of the greenback against commodity currencies was the key factor.  

Earlier, the aussie spiked higher following comments from Reserve Bank of Australia Governor regarding monetary policy and the possibility of introducing QE, but it quickly pulled back. According to analysts at Rabobank, the Australian government is under pressure to relax its balanced budget target. “Whether or not it does could be a significant determinant in whether the RBA can avoid resorting to QE in the foreseeable future”.

Analysts at Rabobank forecast that AUD/USD is set to push lower over the medium-term and to edge towards 0.65 on a 12-month view. “If the RBA were to embark on QE, downside potential for the AUD would likely be accentuated.”

US data released today showed better-than-expected numbers from the housing sector but did not help the greenback. It dropped also versus the loonie and kiwi while it rose versus the yen and the pound. The DXY was about to finish flat around 98.30.