AUD/USD Forecast DEC. 30, 2011, Fundamental Analysis

The AUD/USD pair retreated to its lowest level in a week after the US dollar soared against most of its major counterparts due to the return of risk aversion in the financial market.

The US dollar soared against other majors, recording its highest level in eleven months against the euro, as the European Central Bank announced that its balance sheet increased after it lent more money to the financial organizations last week.

The market sentiment shifted to risk aversion after the ECB announcement, which reduced demand for higher-yielding currencies such as the Aussie, opening the way for the greenback to record more gains before the year-end.

On Friday, both economies will not issue any fundamentals, where the pair’s movement will depend on the current market sentiment.

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