AUD Continues Surge

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The Australian dollar continued its rise this week, particularly against the USD and the GBP.

On the AUD/USD front, the Aussie dollar hit a 3-week high by breaking through the 1.0300 barrier for the first time since 22 February. There were initial concerns that the AUD would fall back again due to the recently-released home loan figures for January. According to the Australian Bureau of Statistics, approvals for home loans fell by 1.5 per cent during the month. However, those concerns were tempered by the 2 per cent increase in consumer sentiment index released by the Westpac Banking Corporation. From 108.33 in February, it rose to 110.54 during this month. The figure is the highest the index reached since December 2010.

The index is used to provide a picture of the level of optimism Australian consumers have on the overall state of the country’s economy as well as their personal financial situation. A higher figure means higher levels of confidence, which means people make more purchases, while the opposite is true for lower figures.


Meanwhile, the AUD rose to 69 British pence for the first time in 28 years. The rise was mainly triggered by the rise of the USD against the GBP in the past month due to concerns of the British economy’s possible return to recession.

Analysts said that the surge may not be over yet, as the AUD is seen to rise to 72 pence, or even 80 in the coming months.

The rise would certainly benefit Australian holiday goers to the UK, although it would be difficult for people at the home front, particularly exporters. With a strong dollar, it means that those in the exporting business actually earn less as the value of the dollar rises. However, the Reserve Bank has not indicated that it plans to intervene anytime soon, so all businesses could do is hope for a dip in the dollar for now.

By FX Strategy Team, Published on 13th of March 2013
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