The Australian Dollar began trading last Monday around the 1.511 mark against the British Pound and 0.9722 to the US Dollar.
The so called Aussie strengthened throughout the week to close on 1.4973 to the British Pound and 0.9661 to the US Dollar on Friday. As markets opened on Monday morning the Australian Dollar began to weaken on a lower gold price coupled with results from the G20 meeting held in Moscow over the weekend.
Investors expected G20 to take action to negate the recent controversial expansionary policies of Japan. However this was not the case which resulted in markets selling off the Yen. The corresponding weakening in the Yen resulted in the selling off and weakening of the Australian Dollar. This can be attributed to Japan being one of Australia’s primary export destinations, thereby resulting in the currency pairs being highly correlated.
The weakening Australian Dollar on Monday was supported by comments from Reserve Bank of Australia (RBA) board member John Edwards, who made a significant remark at an Economics Forum in Sydney. “The exchange rate is very high,” Mr. Edwards told The Wall Street Journal on Friday. “It would be helpful if it was a bit lower.”
“The Australian dollar was mostly in demand into the weekend but was sideswiped midsession when RBA’s Edwards declared the Aussie to be ‘incredibly high,’” said Sean Callow, currency strategist at Westpac.
Looking at the week ahead; we can expect market participants to be keeping a close eye on tomorrow’s release of minutes from the RBA’s February board meeting. Other domestic news to look out for this week will be RBA’s governor Glenn Stevens’ half-yearly appearance before a federal parliamentary economic committee on Friday.
By Saskia Johnston
Exchange rates as of 18/02/2013 at 07.45am.
GBP/AUD: 1.501
EUR/AUD: 1.295
AUD/USD: 1.029
AUD/NZD: 1.220
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.
[ Source: Australian Times ]