Dollar Review – Aussie sees significant swings

The Aussie has had a busy week falling against 15 of its 16 major counterparts towards the beginning of the week. Towards the end of the week we saw a slight upturn as the Aussie managed to recover after reports that theUSeconomy has started to show promise once again despite the Debt Crisis inEurope.

Markets suspect that the upturn in the Aussie has been dampened due the imminent release of the minutes from the meeting of the Reserve Banks of Australia where interest rates were cut yet again. The overnight cash rate has been cut. This is the first back-to-back reduction since 2009.

Emma Lawson a currency specialist at National Australia Bank was cited as saying that the market would have expected the RBA to have downgraded the economic outlook so as to support the rate cut, so what we will be looking for is the degree to which the European situation was responsible for this.

The Aussie has continued to wobble amid concerns that the Eurozone will not be able to contain the debt crisis as additional funding has been discussed though the International Monetary fund. Further losses were incurred for the Aussie after the announcement of the death of Kim Jong II, which resulted in a decrease in the demand for riskier assets.

Market sentiment seems to be that owing to the significant risks to the Australian economy further interest rate cuts can be expected in the coming year.

GBP/AUD:      1.5555
EUR/AUD:     1.3068
AUD/USD:     0.9975
AUD/JPY:       77.4663

Exchange Rates at 09:55, 19 December 2011

Composed by Monique Chapman
:: 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.