By TraderVox.com
Tradervox.com (Dublin) – The Aussie continues with a spirited rally, pushing it to make a weekly gain against most currencies as global stocks rallied boosting the demand for riskier assets. Australian benchmark bond yields also rose to the highest in a month as speculation of an agreement between the European finance ministers emerged. Euro zone finance ministers have postponed the decision twice and the November 26 meeting is seen as the last time they will be meeting about Greece. Most analysts and economists expect the finance chiefs to agree on an aid package for Greece.
The Australian dollar has strengthened this week as data from China, the country’s largest trading partner, indicated that the manufacturing sector in China is improving. The demand for the Australian dollar and the New Zealand dollar was boosted despite an Australian billionaire claiming that Australia risks getting into a Europe-like crisis. According to Jim Vrondas, who is a manager at an online foreign-exchange dealer known as OzForex Ltd, the Aussie may extend toward 1.05 level despite its failed attempts to reach this level at 1.03. Jim predicted that the Australian dollar may strengthen to 1.0420 at the start of next week.
The Australian dollar rallied as the MSCI World Index of stocks rose by 0.5 percent yesterday, making it a three percent rise this week. Australian bonds rose as the Australian dollar remained supported despite swaps traders adding to bets the Reserve Bank of Australia may cut benchmark interest rate from 3.25 percent during their meeting in December. According to Jim, the Aussie is showing much strength considering the RBA’s outlook and the market predictions concerning the interest rate.
The Australian dollar rose to $1.0379 against the dollar in Sydney from its close yesterday of $1.0390. The currency had fallen to a low of $1.0288 on November 16 and has also touched its highest of $1.0425 this week.
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