As investors pin their hopes on more movement from the People’s Bank of China to intervene in the Yuan’s strength, antipodean currencies were able to find some support. Both the Aussie and Kiwi Dollars were big movers in the FX market, as a result. Also giving a lift to the AUD/USD and NZD/USD pairs was the firming of Oil prices. There is a strong correlation between Oil and iron ore, which is one of Australia’s largest exports. And despite a 2% decline in iron ore prices on the Shanghai market, according to one BNP Paribas analyst, the outlook appears stable.
As reported at 11:00 am (GMT) in London, the AUD/USD was trading at $0.7229, a gain of 0.61%; the pair has ranged from $0.7186 at the low end to $0.7247 at the high. Meanwhile the NZD/USD pair was trading at $0.6814, a gain of 0.68%; in today’s trading, the pair ranged from $0.6767 to $0.6835.
Aussie Dollar Outlook Calls for Weakening
In spite of the support of the Australian Dollar, analysts still believe the currency has to weaken further in order to be competitive and to aid the Australian economy. Expectations are that the Reserve Bank of Australia will likely push through some sort of monetary policy scheme in order to further depreciate the Aussie Dollar.