AUD Rallies on Renewed Risk Appetite
March 17th, 2010 Posted in Aussie - Kiwi
The Australian Dollar rallied today as world equities and commodities rose on renewed risk appetite. The jump came after Federal Reserve’s decision Wednesday to keep interest rates at an all time low and after a drop in one reading of U.S. inflation boosted investors’ expectations that the Federal Reserve will keep interest rates low for some time.
The Bank of Japan’s doubling of the size of its bank-loan program to keep borrowing costs low as a mean of struggling with deflation also boosted the South Pacific currency. Benchmark rates are 4% in Australia compared with 0.1% in Japan and as low as zero in the U.S.
The AUD traded at a 2 month high versus the USD as the price of gold, the nation’s 3rd most valuable commodity export, advanced and the price of Crude Oil rose above 83$ a barrel.
Australia’s currency is at 92.23 U.S. cents from 91.85 cents yesterday. It earlier rose to 92.51 cents. The currency also gained 0.3 percent to 83.65 Yen.
