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Australian Dollar: The Next to Reach Parity?

It has been a record breaking past few months in the currency markets.  While the EURUSD, the most actively traded pair in the world, made headlines when it surpassed its all time high late September; the story was quickly overshadowed by the Canadian dollar which reached parity with the US dollar.  Six months ago, parity still seemed to be a far fetched idea for loonie traders and now, the Canadian dollar is actually stronger than the US dollar.  Could the same thing happen to the Australian dollar?  Why not?  The currency pair is closer to parity now than the Canadian dollar was five months ago.  Although it is possible for the Australian dollar to be even with the US dollar, the better question to ask is whether it is probable. 

The Australian dollar has already made its mark by rallying over 15 percent in the past eight weeks to a 23-year high against the US dollar.  Clear similarities between the Australian and Canadian dollar’s advance could raise expectations that one Australian dollar could soon equal one US dollar. Like Canada, Australia’s economy is rich in natural resources; enjoys a strong economy supported by domestic spending; and has a central bank that is leaning closer towards further hikes than any sort of policy easing.

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Source: DailyFx