Glenn Stevens sends the Aussie towards 0.85c.

As my plane touched down on Thursday evening it was around 10.00pm and I could not help but immediately switch on my phone and check to see what price the Aussie Dollar was trading at against the US Dollar. My Bloomberg App showed the price 0.9045 which was not far off where the price was when I took off from Auckland 4 hours earlier. That was no real surprise to me as the US Retail Sales number at 11.30pm Qld time was likely going to be the driver over the next 12 hours with any positive news for the US more than likely to drive the Aussie lower. So I grabbed by bags, cleared customs and jumped in the car for the hour and a half drive back to Noosa Heads.

I knew on the drive up the coast from Brisbane that the US Retail Sales number would be released about half an hour before I got home so it would be a question of temptation to whether or not I would glance at my blackberry and push the Bloomberg button.

I waited until at least 5 minutes after 11.30pm before I pushed the button on my phone and immediately I saw the Aussie was trading at 0.8970 which was close to a full cent lower than it was less than an hour ago. I didn't read the article on Bloomberg I just glanced at the headline that read, "US Retail Sales" beat market estimates" and naturally thought that the Aussie had dropped on the back of more positive sentiment towards the US Fed tapering its stimulus program. But a drop of 80 pips?

What I teach all the time is to expect the unexpected and that is what really drove the Aussie lower, unexpected news that had little to do with the US Retail number after all. What really happened was the following.  Glenn Stevens the Reserve Bank of Australia Governor did an interview with the Australian Financial Review that was due for release in its Friday paper but as we all know very well, papers are a dying industry and online is the place people are flocking to read the news. Fairfax publishes the next day’s newspaper on its website usually before midnight the previous night and what had happened to the Aussie had little to do with the US Retail Sales number and had everything to do with Glenn Stevens comments that hit the online Fairfax news wires sometime between 10.30pm and 11.30pm on Thursday evening.

I made some comments in the LTG GoldRock report last week about the Aussie not going as low as some may think it will but 0.85c seems very likely in the short to medium term now as traders will use this price as a target to aim for now the RBA has signaled its intentions. The RBA as you are starting to learn usually gets what it wants eventually so why would you be silly enough to trade against what a Central Banks wants its currency to do?

Remember that it is the "wisdom of the crowd" that drives price and the crowd is now aiming for that 0.85c number and with the news that is coming this week the lows on the Aussie for 2013 certainly seem like they are coming closer by the day.