Aussie Dollar Up Against US

01 December 2011 - Which Way to Pay

Aussie Dollar Up Against US

The Australian dollar hit a two-week high, hiked largely by the central bank agreement to make lending easier and stimulate financial markets, but helped by positive figures from Asia in late trade. As the Aussie dollar recovered, bond prices dropped on both ends of the curve.

The positive session mark the third consecutive day to see gains for the Aussie dollar, which has gained around 5% so far this week against the US dollar.

The good performance was spurred on by action from major central banks across the world agreeing to cut the cost of emergency funding by 50 basis points in a bid to shore up the global financial system and stabilize the world economy.

As well as this, action from the Chinese banks helped markets inch higher as the reserve-ratio requirements by 50 basis points. This is the first cut of this ilk seen in three years.

By 4pm (AEDT), the Aussie dollar was at $1.0241 US. This is a significant gain from the $1.0007 US it was trading at late yesterday. The currency was weighed on further by the poor October reading for Australian building activity.

The weak data comes a week ahead of the Reserve Bank of Australia’s meeting in which a decision will made as to whether or not to cut interest rates further.