Today, the name of the game is risk appetite on the Forex market. Traders are looking for higher yields in their relief over a possible eurozone debt crisis deal, and the Australian dollar is heading higher as a result.
Yesterday, Aussie faltered a little bit on the news that China’s growth didn’t meet expectations. Due to its reliance on China, the Australian dollar found itself sliding a bit, but China still shows growth, and that is positive in the long run. However, things are turning around a bit today. Risk appetite is back, and that means that high beta currencies have the upper hand today on the Forex market.
In addition to gaining against the US dollar and the Japanese yen, the Aussie is higher against the euro and the UK pound as well. Optimism that something will finally be done about eurozone debt is making an appearance, and positive earnings reports from US financial companies are helping sentiment as well.
There are some misgivings about the Aussie, thanks to the possibility of a rate cut from the RBA, and other developments may mean that the Aussie could fade fast.
At 15:58 GMT, AUD/USD is higher at 1.0275, up from the open at 1.0265. EUR/AUD is lower, down to 1.3401 from the open at 1.3405. GBP/AUD is lower at 1.5325 from the open at 1.5328, and AUD/JPY is higher at 78.88 from the open at 78.61.
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