Australian Dollar continues to strengthen

The Australian Dollar has been trading slightly higher than expected over the last week coming to rest at 0.67 to the British pound and 1.6 to the US dollar.

The recovery of the US economy is teetering on tender hooks as the Fed has warned that US interest rates are predicted to remain near zero for the foreseeable future. Investors have begun to eye relatively high-yielding Australian dollar assets.

Russia is expected to start diversifying their international reserves in the next few weeks and plan to invest in Aussie dollars. Alexei Ulyukayev, the Deputy Chairman of the Bank of Russia, was cited as saying that the Australian dollar program was about to start.Russiacurrently holds the fourth biggest reserves in the world.

Economists have warned that the global outlook remains tentative this along with the warning from the IMF “of a need to avoid a return to 1930s era conditions” infers that the Reserve bank ofAustraliamay be more inclined to easing monitory policy. Michel Turner a strategist at RBC Capital Markets was cited as saying that it is doubtful that the Reserve bank will continue with the current interest rate levels given the sub-trend global growth, replete with material down side macro-financial risks and a sluggish domestic labour market.

Market sentiment seems to agree that over the last few weeks the global economy has been seen to stabilize. AMP Capital Investors Chief Economist Shane Oliver was cited as saying that “the European Central Bank action appears to have reduced the risk of a banking crisis in Europe,U.S.economic data has continued to surprise on the upside and Chinese economic data remains consistent with a soft landing”

GBP/AUD:      1.4755
EUR/AUD:     1.2397
AUD/USD:     1.0663
AUD/JPY:       81.764

Exchange Rates at 09:55, 30 January 2012

Composed by Monique Champan
:: Note: The above exchange rates are based on “interbank” rates.  If you want to transfer money to or fromAustraliathen please register/login on our website, www.1stcontactforex.com, or call us for a live dealing rate.  Make use of a Rate Notifier to send you alert when the Australian exchange rate reaches levels you are looking for.