Australian Dollar Trajectory Depends on Greece Debt Crisis
The Australian Dollar finished the week almost exactly unchanged against its US namesake, setting fresh two-month highs before tumbling into Friday’s close. Early-week rallies in key financial asset classes bolstered the high-yielding Australian currency; given the highest short-term interest rates of the G10, the AUD remains a key target of global speculative capital. It nonetheless serves to note that the minutes from the most recent Reserve Bank of Australia interest rate decision dampened optimism for the future of domestic yields. RBA Governor Glenn Stevens said that the bank’s proactive interest rate increases gave it considerable leeway for the timing of future policy tightening. The week ahead likewise promises RBA event risk with the bank’s Financial Stability Review due Wednesday. Yet an otherwise empty week of Australian economic event risk leaves the currency roughly at the whims of broader financial trends.
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