Australian Dollar strengthens on AAA ratings
AUSTRALIAN DOLLAR REVIEW | The Australian Dollar has seen a strong performance over the past week, coming to rest at 1.0568 to the US dollar and 0.6755 to the British pound.
THE Australian Dollar has seen a strong performance over the past week, coming to rest at 1.0568 to the US dollar and 0.6755 to the British pound. These are levels we have not experienced since late March this year. This comes amid rumours that the US Federal Reserve and the European Central Bank may under take further monetary stimulus.
Australia is currently one of a few countries to have maintained their AAA rating by all three major credit-rating firms. Mackel at HSBC was cited as saying that he believes that the world of triple-A is a lot smaller than it used to be. It’s quite clear to him that foreign investors still see Australia as a very sound investment destination. He furthermore said that this type of capital flow has been, for the bond market in particular, quite supportive of the currency.
On the domestic front, the Aussie was seen to strengthen after reports showed Australia’s building approvals decreased by less than economists had expected. Expectations have arisen that the Reserve bank will continue to cut the key cash rate from 3.5 percent to 2.8 percent in coming months.
Market sentiment shows that economists have attributed the Aussies climb not to domestic data but rather to a surge in risk appetite. Further lifted by the collapsing sovereign debt yields in Europe and surging global equity markets.
Exchange Rates at 09:58, 6 August 2012
Composed by Paul Gerber of 1st Contact Money Transfers
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