As widely anticipated by many analysts and investors, Australia’s Reserve Bank raised a key interest rate by 25 bp to 3.25% today. Thus the RBA becomes the first central bank within the G20 to acknowledge the easing of the global fiscal crisis. As a result, the Australian Dollar rallied to $0.8876 versus the U.S. Dollar, a 14-month high.
Also profiting from the RBA’s decision, the New Zealand Dollar rose to $0.7357, also a 14-month peak. An FX distribution manager in Tokyo suggested that while there may be some profit-taking in the next few days, over the longer term, the Australian Dollar will continue to gain.
An already weakened U.S. Dollar continues to fall, helped along by a rumor published in a British newspaper suggesting that secret talks were being held in the Arab Gulf States, the topic of which is to discontinue using the greenback for trades. Among the participants in the alleged secret talks were representatives of China, Russia, Japan and France.
The proposal on the table is to phase in the use of a basket of currencies which would include Yen, Yuan, Euro, gold, etc., in place of the U.S. Dollar. Versus the Japanese Yen, the U.S. Dollar traded at 88.91 Yen, a loss of .7% and creeping near to the 8-month trough hit last week on the EBS trading platform. The Dollar was also down versus the single currency Euro, trading at $1.4722, a loss of .5%.
Also profiting from the RBA’s decision, the New Zealand Dollar rose to $0.7357, also a 14-month peak. An FX distribution manager in Tokyo suggested that while there may be some profit-taking in the next few days, over the longer term, the Australian Dollar will continue to gain.
An already weakened U.S. Dollar continues to fall, helped along by a rumor published in a British newspaper suggesting that secret talks were being held in the Arab Gulf States, the topic of which is to discontinue using the greenback for trades. Among the participants in the alleged secret talks were representatives of China, Russia, Japan and France.
The proposal on the table is to phase in the use of a basket of currencies which would include Yen, Yuan, Euro, gold, etc., in place of the U.S. Dollar. Versus the Japanese Yen, the U.S. Dollar traded at 88.91 Yen, a loss of .7% and creeping near to the 8-month trough hit last week on the EBS trading platform. The Dollar was also down versus the single currency Euro, trading at $1.4722, a loss of .5%.