AUD Surges Past 0.7000 Amid Suspected Japanese Intervention
The Australian Dollar (AUD) surged past a significant milestone on Thursday, trading above 0.7000 against the US Dollar (USD) for the first time in months. The pair's advance was fueled by a sharp decline in the USD/JPY rate following a suspected Japanese intervention that Tokyo has not confirmed.
The intervention, which saw a massive sell-off of around $8.1 billion in USD/JPY trading over a ten-minute period, sent shockwaves through the foreign exchange market, with the Dollar Index falling to a seven-week low near 100.
However, the AUD's gains may be short-lived, as its trade deficit against Japan has widened significantly since the intervention. The pair's price action suggests that it is heavily influenced by carry trades, which could leave it vulnerable to further losses if Japanese authorities decide to take further action.