Aussie up on rising Asian equity markets

07-20-2009 15:12

The Australian Dollar reached a two-week record high against the Japanese Yen on the back of rising equities in Asia, which made the Aussie more interesting for yield-seeking investors. In the previous week the Australian currency posted excellent results, boosted by the US figures concerning corporate earnings. Commodities continued to increase, on which the Kiwi (New Zealand Dollar) and Aussie started bullish mostly versus the US Dollar and Japanese Yen, while South Pacific currencies became more attractive. The S&P/ASX 200 index climbed for the fifth consecutive day due to renewed risk appetite among investors. Australia’s overseas trade consists for more than 50% of commodities and for that reason the Australian Dollar reached the highest level in two weeks against the Yen as crude oil and various other commodities increase. In the meantime the Japanese Yen is declining considerably, caused by decreasing risk aversion.

Rising confidence

Traders became more confident and started to seek high-yielding investments massively due to various reports from the US, such as the corporate earnings report, which exceeded economists’ forecasts. Two weeks ago the Aussie declined considerably against the Japanese Yen while the present market situation creates the ideal conditions for traders to gain from the rising Australian Dollar.