AUD and JPY Performance Review
August 18th, 2009 Posted in Aussie - Kiwi
The Australian Dollar rose from near its lowest level in more than two weeks versus the Yen following a rebound in risk appetite as stock markets rallied. Assisting the AUD further were speculations that the currency’s sell-off the past two days was excessive. Gains, however, were tempered after the RBA signaled that it is unlikely to raise interest rates any time soon.
Australia’s economy grew 0.4% in the first quarter, as lower borrowing costs and government spending helped fuel domestic demand. Consumer and business confidence have jumped in recent months, and the forecast is for a 0.5% growth for the year. However, since Australia’s economy is highly dependant on exports, particularly to Japan and China, long term recovery is dependant on economic activity in these countries and recent indicators seem to point to a slow down in growth.
While Japan’s 3.7% economic expansion last quarter ended the country’s recession, the expectation is for the growth to slow from now on. Domestic demand in Japan continues to be extremely weak, hindered further by rising unemployment and fears of deflation, while demand for exports is mired by the recent worst than expected economic data from the U.S and China. It is therefore likely that equities will continue dictating direction for the two currencies throughout this week as well.
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Tags: AUD, AUD forecast, AUD trading, AUD/JPY, Aussie, Forex, forex blog, forex tips, Japanese Yen, JPY, JPY forecast, JPY Trading, yen
