The New Zealand and Australian currencies continued their bearish trends against the Japanese yen today and dropped on Forex market during the Asian trading session, as the Japanese stock market plunged.
The Reserve Bank of Australia increased the national benchmark rate for the second time in 2008 — from 7.00% to 7.25%. The last time interest rate was increased on the 5th of February.
After one of the worst weeks for the U.S. dollar and the attraction of the large capitals to the high-yielding assets this week, the Australian dollar reached its record high value against USD in 24 years.
New Zealand dollar reached the two months high level against the Japanese yen and almost broke the more than 6 months record high level against the U.S. dollar today. Aussie also showed a similar dynamic of growth — it came close to the 2 months old records against yen and reached its highest value against the U.S. dollar since November 2007.
The Australian dollar rose today against other major currencies, as the bank’s minutes release hinted markets that the Reserve Bank of Australia will probably increase the interest rate by 25 basis points again next month.
According to the new research note by Richard Grace from the Commonwealth Bank of Australia, it would be better to buy Australian dollar with euro in 2008 to earn from the interest rates difference.
Today during the Asian trading session on Forex Australian dollar continued its bullish trend against the U.S. dollar and reached the new maximum value since 14th of November, 2007.
Today both the Australian and New Zealand dollars continued their daily growth against their counterpart from the United States on willingness of the Forex traders to earn from the interest rates difference.
The Australian dollar gained yesterday after the Federal Reserve announced an emergency rate cut from 4.25% to 3.50%. It also continued to gain today through the most of the Asian trading session, but has already went down past the daily opening price.
Both Australian and the New Zealand dollars gained today on a presumption that the international investors bought Australia’s and New Zealand’s government bonds as their premiums yield more than their U.S. and Japanese counterparts.