Tuesday saw the Australian dollar increase in value against the U.S. dollar as all eyes fell on the European Central Bank and the long-term refinancing operation it is set to embark on, Bloomberg reports.
The drive of the LTRO is to fortify debt-hobbled euro zone banks that have been victimized by the sovereign debt crisis, which has been raging for two-plus years. Stocks in Asia bounced back, also pulling up the value of the Aussie as higher-yielding asset demand grew. The New Zealand dollar bounced back from losses it suffered on Monday to the "http://www.danielstrading.com/markets/currencies/?refid=2000&utm_source=commodity-futures-news&utm_medium=rss&utm_campaign=currencies" class="dnautolink">monetary unit of the Pacific Rim nation. Yet a focus continued training on Greece and whether it will stay afloat financially after having accepted two tranches of international bailout aid since June 2010.
"Most participants do expect that Greece will default at some point," strategist Andrew Salter with Australia & New Zealand Banking Group in Sydney told Bloomberg. "The Aussie would underperform against most currencies in such an event."
The performance and impact imparted by the refinancing operation of the ECB is likely to direct market sentiment during the coming days' trade market, according to Dow Jones Newswires.