Trading the Australian dollar was a classic play for those who didn't have direct access to China, and a sure-fire winner on the short side.» Read More
Asian stocks cruised higher on Friday, lifted by a positive U.S. lead and as investors bet on the possibility of further stimulus from Japan and China.
The dollar rose against a basket of currencies as underlying domestic inflation strengthened more than expected in September.
The Australian dollar is under pressure from softer China data and Westpac's move to hike mortgage rates, explains Sally Auld, fixed income and FX strategist, Australia & New Zealand at JPMorgan.
Asian shares outside China slid deeper into the red on Tuesday, after trade figures added to concerns over China's economy.
Richard Jerram, chief economist of the Bank of Singapore, says Australia's economy may have reached comfortable levels on the back of a "more sensible" Australian dollar.
The Aussie dollar has further room to fall and adjust to support weak demand for Australia's commodity exports, says Malcolm Wood, chief investment strategist at BAML.
Australia's economic engine has sputtered as the commodities boom loses steam, but the country could get a fillip from legalizing same-sex marriage.
If housing starts to erode economic activity, the Reserve Bank of Australia may ease by December or early 2016, says Sean Fenton, director and portfolio manager at Tribeca Investment Partners.
Investors should watch for Tuesday's RBA rate decisions for hints as to how worried the central bank is about the global economic slowdown, warns Wayne Gordon, commodities and FX strategist at UBS Wealth Management.
The currency is doing the "heavy lifting" for the Reserve Bank of Australia, explains Savanth Sebastian, equities economist at Commonwealth Securities.
Further upside for the U.S. dollar will be a struggle on the back of a soft labor market and a Fed rate hike delay, says Michael Every, head of financial markets research, APAC at Rabobank.
Central banks are in the spotlight in the week ahead, with decisions on monetary policy due in Australia and Japan.
Asian shares outside Japan advanced on Friday after the Fed decided to hold off on its first rate hike in nearly a decade.
Chinese shares took another tumble on Tuesday amid persisting worries about the health of the world's second-biggest economy.
Christoffer Moltke-Leth, director, Global Sales Trading at Saxo Capital Markets, expects the Aussie dollar to touch 72-73 U.S. cents soon on the back of the country's leadership change and hopes for more China stimulus.
While the Australian dollar could fall further if the Fed raises interest rates, it will stabilize around $0.68 against the greenback over the next 3-12 months, Tan Teck Leng, FX analyst at UBS Wealth Management.
Australia experienced the slowest economic growth in two years over the second quarter due in part to a sharp fall in export volumes.
The Australian dollar cracked below the key psychological level of $0.70 for the first time in over six years on Wednesday.
Michael Blythe, chief economist at Commonwealth Bank, says Australia's economy still faces several challenges including the downturn in mining activities and its large exposure to China.
David de Garis, senior FICC economist at National Australia Bank, talks about Australia's currency and recent decisions by the country's central bank.