Spain bailout news gives Australian Dollar strength
AUSTRALIAN DOLLAR REVIEW | THE Australian Dollar strengthened further over the weekend, moving back close to parity with its US counterpart, on news of a bailout for Spain’s beleaguered banks.
THE Australian Dollar strengthened further over the weekend, moving back close to parity with its US counterpart, on news of a bailout for Spain’s beleaguered banks.
The Aussie rested around the 0.99USD mark on Monday while trading at around 0.64GBP.
This comes after the RBA lowered interest rates by 0.25 percent and the release of Australian unemployment figures.
A senior market strategist at Westpac New Zealand was cited as saying the key impetus for the Aussie’s strength was based on commentary suggesting that leaders in Europe and the US were nearing solutions for their economic crises.
Speculation of further stimulus for the US economy has had a positive effect on risk appetite over the past month. Although analysts have warned that markets will remain volatile with risky assets remaining vulnerable.
Koon Chow, a strategist at Barclays Capital, was cited as saying that market expectations have grown for a new wave of quantitative easing in the major developed market economies. Although this may not address the cause of the current challenges or allay market anxieties related to banking and sovereign solvency. He furthermore added that until these problems are tackled head on, it will be hard for emerging market assets to rally independently.
On a domestic note, growth figures have substantially helped the local currency, with GDP rising by 1.3 percent in the last quarter. This is much higher than the forecasted 0.6 percent growth that markets have been expecting.
Exchange Rates at 09:19, 11 June 2012
Composed by Monique Chapman
:: Note: The above exchange rates are based on “interbank” rates.
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