Australian dollar up in forex trading on interest rate decision
In a surprising move, the Reserve Bank of Australia opted to boost interest rates. The news was shocking, and brought Australia’s already comparatively high rate of 3% up to 3.25%. The news, as one might expect, sent the Aussie soaring in currency trading on the FX market.
The news comes as Australia benefits from increased demand out of China. Chinese demand for Australian commodities is driving the Australian economy. GFT’s Boris Schlossberg reports on FX360 on the effect China has on the Australian economy:
As we stated earlier, “In what is becoming an ever more pronounced trend in G-20, the Anglo-Saxon economies of the West (US and UK) burdened by the overhang from the financial crisis continue to lag in the recovery, while the Anglo –Saxon economies of the East (Australia and New Zealand) benefiting from the Asia’s insatiable demand for commodities have quickly returned to trend growth.”
Clearly, the proximity of Down Under countries is helping them in a global economy that is becoming increasingly Sino-centric.
This Australian dollar boosted the risk trade in forex trading, sending the dollar lower. The only exception was the U.K. pound, which is performing poorly as more disappointing economic news comes to light.
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