Re-widening of the interest rate differential will see the Australian dollar higher. Rumors of the Medley report that the Fed will stop tightening at 4.75 percent or 5 percent is below market expectations.

A shakeout in the commodity market in the near-term may weigh on the Australian dollar. We see further downside risk.

The Australian dollar may struggle, simply because we perceive a further narrowing of interest-rate differentials.

The impact of day-to-day changes in the yield spread remain significant for the Australian dollar. That's clearly an issue for buyers of the currency.