The Australian dollar continued its gaining streak today, rising against the other major currencies, as the economic analysts expect rate increases and the global investors avoid US dollar.
The Aussie (which is a nickname for the Australian currency) managed to grow against the US dollar for fifth day, also gaining considerably against the Japanese yen and the euro. While isolated analysts forecast rate cuts in Australia due to the declining commodity prices, the majority of the banks’ research departments predict about three rate hikes (for 25 basis points each by the end of the year). Adding more interest rate differential is definitely going to make the Aussie an attractive investment target.
Other point that affects the Australian dollar’s market behavior is the fears of some global investors connected with the current situation with the US public debt. The Congress is still blocking any attempts to increase it, while the final date for that (August 2) is approaching. If the consensus won’t be reached until then, the United States will be in state of a technical default. Under these conditions some currency traders prefer to convert into something that is considered safe — and the AUD is one of them.
AUD/USD rose from 1.0849 to 1.0867 as of 18:20 GMT today, reaching intraday high of 1.0876, which is the maximum level since May 11. AUD/JPY went up from 84.88 to 85.03. Meanwhile EUR/AUD declined from 1.3267 to 1.3241 today.
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