The Australian dollar traded near the highest level in a month against its US counterpart and was at September’s high versus the Japanese yen after the Federal Reserve announced quantitative easing, spurring risk trading on the Forex market.
The anticipation of Fed’s monetary decision was driving the FX market for the whole week. The central bank made an announcement of QE3 and growth-related currencies surged to the upside. Now traders’ attention will turn to Europe once again amid uncertainty about the bailout for Spain and Greece’s possible exit from the eurozone.
There is another important issue for those interested in trading the Aussie to consider: China. Will the Asian economy experience a hard landing or the government will manage to stimulate growth? The answer to that question may define the strength of the Australian currency for a long time.
AUD/USD climbed from 1.0542 to 1.0572 and AUD/JPY rose from 81.68 to 81.98 as of 1:59 GMT today.
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