Australian Dollar Rises for the Third Day
The Australian dollar rose against the U.S. dollar and the Japanese yen for the third day today after the rate cut in U.S. and a moderate decline in the global risk-aversion.
The Aussie gained against the U.S. dollar after the Federal Reserve reduced the interest rate by 50 basis points to 1 percent. Chinas central bank cut the one-year lending rate from 6.93 percent to 6.66 percent — for the third time in a year. Growing commodity prices also supported the Australian currency.
Lower interest rates bring some fresh air to the investing with the risks higher than those of the national bonds. The weakening of the greenback and the growth of the commodities are the direct advantages for the Australian and New Zealand currencies.
The readiness of the FOMC to continue cutting rates to the record low, expressed yesterday during the meeting, also help such high-yielding currencies as the Australian dollar to stop falling. Its too early to say whether the carry trade could return to the Forex soon, if the global financial system recovers. But a slow long-term upward move based on the rate difference can be the next big trend on the market.
AUD/USD rose from 0.6701 to 0.6777 as of 8:51 GMT today with a daily high at 0.6889. AUD/JPY went up from 65.23 to 66.62 today, reaching 67.95 during the early trade.
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