Signs that the Australian economy is strengthening also buoyed the ‘Aussie’. A lack of negative comments by the Reserve Bank of Australia is also supporting the currency. Governor Glenn Stevens seems to have eased off on his attempts to weaken the currency.
“The Australian Dollar has started to strengthen on the back of those slightly worse US jobs figures last week and Stevens not jawboning the Australian Dollar. We had ANZ jobs ads this week with the number of job ads rising which means we’ll hopefully see unemployment start to drop- there are signs the economy is picking up. We’ve also got rising house prices meaning that another interest rate cut is not likely, these are all working together to keep the Australian Dollar strong,” said a currency dealer.
The currency continued to move higher despite the release of a softer business confidence report leaving AUD to USD exchange rate around 0.9336.
The ‘Aussie’ is likely to continue its push higher and could reach as high as 95 cents as the People’s Bank of China took action by buying Australian Dollars and as demand for bonds by Japanese investors support.
Once the currency reaches 95 cents we can expect the RBA to begin to try and talk down the currency in an effort to protect the nation’s exporters.
The ‘Aussie’ is likely to advance further tomorrow when Westpac releases its latest consumer confidence index. The Australian Bureau of Statistics is also due to release housing finance data.