THE Australian Dollar managed to make a decent recovery last week, despite a flurry of negative data released. The Aussie finished stronger for the week on 1.57 against the pound on Friday, down somewhat from the mid-week high, after starting the on Monday in high 1.58 territory.
The mid-week strengthening was attributed largely to speculation that China was about to implement measures to stimulate economic growth, which would bode well for Australian trade. The result was a quick upward burst against 14 of the Aussie’s 16 most traded currency peers.
Takuya Kawabata, of Gaitame.com Research Institute summed up the relationship, “Because of the change in China’s leadership, there are expectations for stimulus measures. Stimulus would be a positive for China’s economy as well as Australia, so it’s a positive for the Aussie too,” Kawabata told Bloomberg.
The new positivity comes after earlier news that Australia’s exports to China dropped by 18% in September, compared to the same time last year.
The Aussie’s spurt of energy was dampened though by the International Monetary Fund (IMF) after they reduced growth forecasts for Europe. Ratings agency Standard & Poor cut Spain’s credit rating, thereby scaring investors away from risk assets, and so the Australian Dollar.
The European Central Bank went on to release news of an unlimited bond purchasing program, intended to assist the region financially.
For the week ahead, eyes with be on Thursday’s European leaders gathering in Brussels where they will be hearing Greece’s justification for renewed aid, as well as discussing Spain’s prospects.
GBP / AUD: 1.568
EUR / AUD: 1.265
AUD / USD: 1.022
AUD / NZD: 1.255
Exchange rates as of 10:05am, 15 October 2012
Composed by Jesse Crooks of 1st 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.