Swine Flu Could Damage Aussie Economy

The AUD USD should continue to rally as long as trader appetite for risk is increasing.  Gains could be limited if the Swine Flu outbreak begins to reduce tourist traffic.

The AUD USD followed the stock market higher most of the week as traders sought the higher yield in exchange for more risk.

The pace of the rally in the Aussie began to slow late in the week because of the possibility of an overpriced equity market. Australian Dollar traders should also be concerned about the Swine Flu outbreak. If this virus lingers and spread globally then the economy is likely to suffer because of a slowdown in tourist traffic.