The Australian dollar climbed today versus most of the 16 main traded currencies as the national central bank affirmed that the largest financial institutions in the country showed themselves resilient from the crisis and are helping the country to recover from the worst recession in decades.
The Reserve Bank of Australia provided support for the Aussie to climb against virtually all main traded currencies today as it declared that banks in the country are weathering the country’s economic difficulties, spurring demand for the Australian currency which has been one of the biggest winners this year so far in trading markets. Other reports also improved attractiveness for the Aussie, as new home sales jumped to the highest level in four years, creating a perfect pattern for traders to search high-yielding opportunities in the South Pacific region, as New Zealand is also recovering faster than other wealthy nations from the global slump.
The optimism towards Australia can be explained by several reasons according to JR Crooks, director of research at Black Swan Capital:
With the potential for China to recover and pump the globe with growth, Australia benefits as they supply much of the natural resources et al. that China uses to produce goods.
Australia also was not so much affected by the credit crunch last year, fact which is providing a better outlook towards the South Pacific than other economic regions:
Australia hasn’t had to tackle the banking/financial fiasco to anywhere near the same degree as have the U.S., Europe, U.K. and others.
The forecast for the Aussie remains bullish, as long as the world economy continues to revive.
AUD/USD rose at 0.8741 as of 11:51 GMT after being traded at 0.8653 hours earlier.
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