FX FXA Invesco CurrencyShares Australian Dollar Trust Loading... : Investor Sentiment and Bull/Bear Views

Buy AUD via FXA as commodity price surge supports terms of trade and provides floor under RBA.

The Aussie dollar you're right, with energy, with mining capabilities of Australia, that does subtly seem to be the only FX diversification trade currently. While the USD is the primary haven, investors seeking FX diversification away from the dollar can look to the Australian Dollar. Australia's status as a net energy and commodities exporter means its currency fundamentally benefits from elevated global resource prices. LONG FXA as a commodity-backed currency play that hedges against Middle East energy disruptions. A broader Asian economic slowdown, particularly in China, caused by high oil prices could severely reduce demand for Australian exports.

"For example, Australia and the UK, they had a 10% rate. They are now getting a essentially 50% increase, up to 15%." US allies who previously negotiated preferential lower rates (10%) are losing that status. Their cost to export to the US just jumped 50%, which is a headwind for their equities and currencies compared to the previous status quo. Short UK and Australian equities/currencies as they lose trade privileges. The 150-day limit suggests this might be a negotiation tactic; if exemptions are quickly re-established, the trade reverses.