We can note how important is the investment diversification factor in the graph that overlaps the emerging stock performance with the trend of AUDUSD. Already in recent weeks, we highlighted the suspicious behaviour of the falling Aussie and the emerging market that was curiously resistant. The almost vertical fall of the last days of the MSCI Emerging has now realigned the two variables confirming that if the emerging will not restart, then hardly the Australian dollar will recover in the coming months.
But apart October, which could be seasonally favourable, there is another problem. Looking at the placement of hedge funds on the futures market, we can see how a primary low of the AUD was recorded with a net short positioning by non-commercials. At the moment, instead, we have a still substantial number of net long positions of Aud, that suggests that there may be still important margins of fall (Graphic source: Bloomberg).
But apart October, which could be seasonally favourable, there is another problem. Looking at the placement of hedge funds on the futures market, we can see how a primary low of the AUD was recorded with a net short positioning by non-commercials. At the moment, instead, we have a still substantial number of net long positions of Aud, that suggests that there may be still important margins of fall (Graphic source: Bloomberg).
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