The AUD USD closed higher for the week, but the pace of the rally was slowed by the rangebound trade in the U.S. equity markets. Some traders also feel the Aussie Dollar is overbought in the short-run while others believe that the expected 25 basis point hike in the benchmark interest rate by the Reserve Bank of Australia is already priced in. The RBA meets on October 5.

The USD JPY hit a key 50% price at 80.40 as forecast, triggering some light profit-taking. Although traders anticipate another round of intervention, there has been no notable central bank activity at this time. This could mean that aggressive traders will continue to push the Dollar/Yen lower into the next retracement level at 80.04.

December Gold soared to the upside on Thursday following a sharp break in U.S. equity markets. Traders increased their long hedges in gold on the stock market weakness. As mentioned several times the past few weeks, gold (hard asset) and stocks (paper) are competing for the same investment Dollar. Gold has had a tendency to rally lately following sell-offs in the stock market.

The U.S. Dollar fell sharply across the board on Thursday as trader demand for risky assets soared following a bullish economic report out of Europe last night.