Aussietravellers - I would buy some now and watch the rate and buy some more over the next couple of days/weeks. I personally think that the markets are reacting to what is happening in Europe and going back to treating the USD as the world reserve currency, which they have not done since the GFC.
I also got the distinctive feeling that the US is heading out of recession. Shopping at the malls/outlets has definitely picked up and I found the malls/outlets to be much busier this time round and much more people willing to spend money than in 2009 or 2008. If there are good retail/economic figures coming out of the US for the previous quarter (and I'm not sure when the next set of economic indicators are due - I seem to think that it's usually the 3rd week of the month), then it is likely that the nervous investors will go back to holding USD as the reserve currency.
That being the case, plus the fact that European countries have overstretched their borrowings, the Aussie dollar is more likely to fall some more against the USD. There is nothing wrong (yet) with the economic data coming out of Australia - it's just that in times of uncertainty, the investors will go back to the traditional safe havens of USD and gold and sell off other "riskier" currencies like the AUD. Our dollar is linked to resources and these have been dropping a little bit over the last month.
I also think that this situation is unlikely to clear up in the short term - there is a real threat of sovereign debt default in Europe and I don't think that Germany will run in to support Greece, Portugal, Spain etc. Germany has their own issues with sovereign debt. I think that the only way for Europe to stabilise is if they drop interest rates in a concerted move like they did when the GFC happened. It's anyone's guess as to how likely this is going to be and whether the US and the UK would also rush in to drop their interest rates.
I pointed out in a previous thread that the traditional support/resistance points for the AUD in this price range are around 81.5 cents and then the next resistance point is around 79 cents. If the dollar falls below 81.5 cents, it will head to 79 cents (and under). If it goes up above 83 cents, it will head towards 84.5 cents. An each way bet would be appropriate (and if it were me, I would more likely buy more at 80 cents).
Oh - and our reserve bank has signalled that it is likely to "pause" in June and not put interest rates up - so there is no incentive for investors to buy AUD (and push the price up).
Disclaimer
All views presented here are solely personal and speculative. The author holds no responsibility or liability in any event!!