THE Australian Dollar closed last week about where it had started after a slew of data out of China and the USA handed the currency a choppy few days.
The two-month high of the previous week was clipped by disappointing Chinese trade data, and compounded by a less-than-spectacular increase in the number of approved home loans in the country. Lee Wai Tuck, of Forecast Pte in Singapore told Bloomberg the weak numbers would “put some question marks as to whether the rebound in the economy is sustainable” and that China’s demand for Australian exports could also be questioned.
The Aussie reached a three-month high against the US Dollar though, after the US Federal Reserve announced fresh stimulus measures in a bid to avoid the so-called Fiscal Cliff. This increase in investor confidence attracts investors to the higher-yielding assets of emerging markets.
Late last week, investors were already pricing the weekend’s change of government in Japan, welcoming to the idea of an expected expansion in monetary stimulus. As a result, the Aussie touched a nine-month high against the Japanese Yen, with the New Zealand Dollar hitting a high last seen in 2008.
Over the next two weeks, focus is likely to remain on the US Fiscal Cliff with uncertainty likely to moderate gains in emerging currencies.
By Jesse Crooks 1st Contact Money Transfers
Exchange rates at 09:00, 17 December 2012
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