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The Aussie Dollar Bounces on Oversold Conditions

Australia’s dollar rebounded from the lowest level in almost three years as a technical indicator signaled recent selling was overdone.

The Aussie snapped a three-day slide after tumbling 9.2 percent since the end of March, set for the biggest quarterly decline since the period ended September 2011. The currency advanced after a private report showed that Australia’s consumer confidence recovered in June after slumping the most in 17 months. New Zealand’s kiwi dollar climbed.

There are “probably quite a few people who’ve got short the Australian dollar near the lows yesterday, and they’re now suffering a painful squeeze,” said Ray Attrill, the global co-head of foreign-exchange strategy in Sydney at National Australia Bank Ltd. “At the moment, there’s the potential for a squeeze up to 95 or 96” U.S. cents, he said. A short position is a bet that an asset’s price will fall.

The Australian currency gained 0.4 percent to 94.65 U.S. cents as of 5:05 p.m. in Sydney from yesterday, when it touched 93.26, the lowest since Sept. 14, 2010. It earlier climbed as much as 0.8 percent. The New Zealand dollar rose 0.4 percent to 79.02 U.S. cents after earlier rallying as much as 0.6 percent….”

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