Wednesday saw the monetary unit of Australia climb to its top value in almost three weeks against the world's reserve currency as demand for riskier assets grew, Bloomberg reports.
The Australian dollar also benefited from speculation about the globe's two largest economies preparing to implement strategies of spurring renewed activity, climbing against most of its rivals as the policy-making arm of the U.S. Federal Reserve convenes two days of meetings that end on Thursday. One analyst noted the Aussie is especially sensitive to activity in China, its top trade partner.
"China's slowdown is the biggest downside risk for the Aussie," analyst Junichi Ishikawa with IG Markets Securities Ltd. in Tokyo told Bloomberg. "The currency is likely to be well supported in the long term, however, should we get more stimulus measures from global central banks."
A private report indicated Australia's consumer confidence increased, which also pushed up demand for the monetary unit.
But Dow Jones Newswires reports strategists with HSBC said the Aussie is heading toward a rough patch, noting the impact of lowered interest rates, a fiscal crisis deepening in Europe. and more asset purchases in the U.S.
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