The higher Aussie dollar will threaten to counter some of the overnight strength in US wheat futures come Monday.
From the outside the strength in the AUD is perplexing, weaker retail sales and lower iron ore prices would generally lead one to think the AUD should be sliding if anything.
You see the punters still believe the RBA will lift interest rates in 2018 and this is attracting buyers. There is also the safe haven aspect of the AUD or its equity markets and the return available against other countries.
Another driver is that we are commodity based. So if emerging markets are doing better versus say the US market or another developed market place than Australia can often benefit by increased export demand of raw commodities.
The punters are saying they are putting a foot in both camps though and looking to short the AUD against those same emerging markets. So what does all this mean for the AUD. If interest rates rise they stand the chance of crashing the economy into recession, quickly. If they don’t rise than money will move out of the AUD and into the next best thing, probably some of those emerging markets.

In the grain game, the US wheat futures market had a higher night. Slower US planting pace than average and technical trade saw all three grades close in the black. Fundamentally there was little support for wheat from an export side or world production problem.