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U.S. existing home sales decline in August

Swedish economic sentiment indicator rises in November

Best Gold Stocks to Buy Now: AABB, GOLD, GDX

Australian private new capital expenditure likely fell further in Q3 2020 - ANZ

U.S. weekly jobless claims unexpectedly decrease

Canadian employment likely declined in November, jobless rate to have risen to 9 pct

Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed

Reserve Bank of India likely to stand pat in December

FxWirePro- Bitcoin Whales accumulation (positive for Bitcoin)

Bank of Korea likely to keep key interest rate on hold at 0.50 pct in November

U.S. personal income and spending rose less than expected in August

U.S. vehicle sales fall again in November

Canada's economy shows growth in July, but growth stalled in

Philippine central bank keeps interest rate unchanged at 2 pct

Taiwanese money supply continues to see strong growth, CBC likely to keep rates on hold in December

Canadian inflation continues to ease, moving closer to the Bank of Canada's target

U.S. durable goods orders sustain robust growth

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Fundamental Evaluation Series: AUD/USD vs. 2-year yield spread

Thursday, December 20, 2018 4:06 PM UTC

The chart above shows, how the relationship between AUD/USD and 2-year yield divergence has unfolded since 2012.

The chart above makes a clear case of closeness between the rate spread and the exchange rate. The spread between the 2-year U.S. Treasuries and the 2-year Australian government bond declined from +253 bps to -72 bps. AUD/USD responded by declining from 1.056 area to 0.729 area.

Recently, the spread has reversed course and the declining Australian dollar is reducing the divergence fast. If the spread continues its reversal, at one point Aussie is likely to find support in it.

In December, the spread declined by 17 bps to 71 bps in favor of the Australian dollar, but, Aussie declined by 200 pips to 0.712 area.

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Fundamental Evaluation Series: AUD/USD vs. 2-year yield spread

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