Aussie up to two-month peak on analysts’ speculations

Aussie up to two-month peak on analysts’ speculations

10-11-2009 13:30

The Australian Dollar climbed to the highest rate in two months versus the Japanese Yen this Saturday after speculations suggested that carry trade may be the result of the interest rate increment by the Reserve Bank of Australia. Currently, the Japanese Yen is being traded at exceptionally high levels versus the Greenback and the main currencies.

First rate hike

Australia was the first industrialized country to increase the interest rate after the beginning of the financial slump last year as the Reserve Bank of Australia raised the target rate to 3.25% on October 6. The rate hike pushed the Aussie up versus the Japanese Yen and other less-profitable currencies.

Massively hit

Measures taken by Japanese financial regulators can hit the Yen massively, while the Aussie is strongly boosted by the moderately tight financial policy of the Australian authorities. A low rate of the Japanese Yen is crucial for the nation’s economic growth as the world’s second-largest economy is based on export. Forex specialists expect that currency interventions by the Japanese central bank on the near term will have a major impact.

Analysts’ speculations

Currency analysts forecast two additional rate increases by the Reserve Bank of Australia as well as a currency intervention by Japan. This scenario could result in the AUD/ JPY rate to reach extremely weak levels by the start of next year.