The Australian dollar rallied this week as optimism returned to the Forex market on the positive signs from the United States. The flow of bad news from Europe paused for a time, easing concerns about the sovereign debt crisis.
Worries about Europe persisted in the first half of the week, weakening commodity currencies. The attempts of the European central bank to inject capital into the European banking systems through loans didn’t helped market sentiment at first. Later, traders looked at the actions of the ECB in a more positive light. In the absence of any major news from Europe, market participants turned their attention to the United States. The economy of the USA continued to provide positive data and supported confidence of investors.
The Australian dollar profited from the positive traders’ mood as well as the minutes of the Reserve Bank of Australia policy meeting that were less dovish than expected. The performance of the Aussies against the US dollar, the euro and the yen was almost identical — the currency fell on Monday and was rising for the rest of the week, though the Friday’s gains were limited. The Aussie’s moves against other commodity currencies were less straightforward and Australia’s currency fluctuated against the Canadian dollar, ending the week with a small drop, but rose against the News Zealand dollar.
AUD/USD advanced from 0.9987 to 1.0143 and AUD/NZD climbed from 1.3065 to 1.3101 this week. AUD/CAD ticked down from 1.0357 to 1.0350, while the weekly maximum was 1.0447 and the weekly minimum was 1.0259.
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