[Calxy]

Since the beginning of July, the correlation of global reserves and the AUD uptrend seems stronger than even with the EUR. This opens up the possibility that central banks, in diversifying out of USD, are looking for a higher beta than they can get by moving into the EUR or JPY. Of course a stronger correlation with the AUD or commodity currencies in general does not mean that more capital in absolute terms is headed into AUD; it means that more capital relative to the size of Australian financial markets is heading in. This may be turbo-charging AUD performance since relatively small buying can tip the balance between buyers and sellers.