The lack of volatility in the FX market is not only helping the really high yield emerging market pairs, but also putting a further bid in the AUD, CAD and NZD...

The lack of volatility in the FX market is not only helping the really high yield emerging market pairs, but also putting a further bid in the AUD, CAD and NZD (or bloc currencies). AUD/USD has broken the 61.8% retracement of the October to January sell-off at 0.9339 and while it is starting to get overbought could be eyeing the November 20 high of 0.9447 over the coming weeks. Shorting is ill advised and while a pullback will happen soon, this look likely to be shallow and well supported. It's worth remembering the Korean exports (released last week) grew 5.2% and they are a really useful guide to China's exports, as the correlation over the years is strong. The key risk to AUD longs here is the Fed minutes at 04:00 and I expect them to be hawkish