Australian dollarThe Australian dollar rallied for almost the whole week, posting the third week of gains against the US dollar in the longest run of weekly gains since April, but by the end of the week fundamentals became unfavorable for the currency.
The Australian dollar was rising on the speculation the Reserve Bank of Australia won’t cut the interest rates. Futures on interest rates indicate only 20 percent probability that RBA Governor Glenn Stevens will cut the bank’s main rate on September 6. Most traders believe that there is 80 percent chance the central bank will maintain the key rate unchanged this month. Australia’s Cash Rate is considered the biggest target lending rate among developed nations.
The rally of the Aussie looked unstoppable until the US non-farm payrolls came out, sending markets in disarray and destroying risk appetite as they came out even worse than most pessimistic forecasts. The Australian currency managed to stay above this week’s opening, but erased three days of gains against the dollar and the yen. What’s worse, it looks like the growth-linked currency may continue to fall next week as risk-aversion style of thinking is returning to markets.
AUD/USD opened at 1.0583, jumped to 1.0764 and closed at 1.0641 this week. EUR/AUD slid from 1.3692 to 1.3346. AUD/JPY jumped from 81.23 to 82.81 during this week before closing at 81.71.
If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.
Earlier News About the Australian Dollar:
* Australian Retails Sales Go Up, Aussie Follows (2011-09-01)
* Building Permits in Australia & New Zealand Rise, Aussie & Kiwi Gain (2011-08-30)
* Aussie Recovers on Stevens' Speech (2011-08-26)
* Australia's Dollar Weakens on Germany's Consumer Confidence (2011-08-25)
* Australia Dollar Receives Help from Commodities (2011-08-17)
This entry was posted on TopForexNews on Saturday, September 3rd, 2011 at 12:32 pm and is filed under Australian Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.