Australian Dollar gains as ECB reinforces optimistic outlook

THE Australian Dollar began trading last week Monday the 23 July around the 1.505 mark against the British Pound and 0.963 to the US Dollar.

The Aussie rebounded on news from the European Central Bank (ECB) reinstated confidence in the future of the European currency. This was communicated in a statement from ECB President Mario Draghi, who vowed to do ”whatever it takes to preserve the Euro”.

On Wednesday evening the ECB called for the Eurozone Stability Mechanism (ESM) to be given an official banking license. This would give the ESM a much larger scope when applying for bailout funds from the ECB. The final decision will be made on 12 September. According to many commentators and policy makers, it is essential to the future of Europe that Germany opts in on the model, as they are one of the biggest investors in the fund.

The comments coming from the ECB had a stabilizing effect on the markets for now by reinstating confidence in the troubled Eurozone area and laying out a transparent and direct plan going forward.

Australian economists are revising their previous predictions and are now leaning more toward an outcome where there will not be an interest rate cut in next month’s Reserve Bank meeting. The consensus thought is that a rate cut will most likely be reconsidered in October’s meeting.

AUD / GBP:           0.6661
AUD / EUR:            0.8509
AUD / USD:           1.0459
AUD / JPY:            81.968

Exchange rates as at 9:00 GMT+1, 30 July 2012

Composed by Paul Gerber of 1^st Contact Money Transfers

Note: The above exchange rates are based on “interbank” rates. If you want to transfer money to or from Australia then please register/login on our website, www.1stcontactforex.com, or call us on 0808 141 2335 for a live dealing rate. Make use of our Rate Notifier to send you alert when the Australian Dollar exchange rate reaches levels you are looking for.