To describe the FX market as muddled over the last few days would be to credit it with a wholly unjustified semblance of orderliness. Investors were confident, scared, optimistic, frightened and upbeat, in that order. The Australian dollar's status as a commodity-oriented "risky" currency meant that it was bought, sold, bought, sold and bought again as investors' mood changed almost with their socks. It was helped overall by a growing suspicion that the US Federal Reserve's appetite for further rate increases this year is fading and by a surprise rate cut - to a negative -0.1% - in the Bank of Japan's deposit rate.
There were no surprises among the Australian economic data. Inflation as measured by the Reserve Bank of Australia's "trimmed mean" was on target at 2.1%. After covering a two-cent range four times the Aussie ended up with a net gain of one US cent and it was up by half a cent against sterling.