Can The Aussie Stay Strong?16 July 2012 21:00 - Currency Exchange Australia
Can The Aussie Stay Strong?
The Australian Dollar has begun the week stronger than it finished last week. It seems this was due to improved global sentiment and increasingly stronger equity markets. Despite this traders warned that this may not last and trouble could occur for the currency over the week. There will be a lot of focus on the US this week as the chairman of the U.S Federal Reserve Ben Bernanke will release a report on the U.S economy to the Senate on Tuesday. Markets are expecting to move towards more stimuli for the weakening U.S economy and any delay or uncertainty from the Federal Reserve could cause market confidence to be crushed further, which would benefit no one.
"If the Fed chairman does no more than present an ambiguous play for time, the market response could be savage," said Emma Lawson, senior currency strategist at National Australia Bank.
Furthermore Lawson said that as Chinese growth data suggests there will be no near-term reversal in global commodity prices, a retest of equality seems the likely decisions for the Australian dollar in the next few weeks. Strategists are saying that the Aussie has benefited from the increased strength of equity markets, but it is going to need to see more to retain its current levels. It has also been warned that the U.S corporate profit reporting season is underway, and could easily cause on or two problems for the Australian Dollar.
Moreover, there is anxiety over the over the release of the minutes of the Reserve Bank of Australia’s last policy meeting. The data is due to come out on Tuesday.