The Australian dollar on Tuesday held on to its biggest rise in about two weeks against the world’s reserve currency as market sentiment indicated the monetary unit’s recent losses were overdone, according to Bloomberg.
The Aussie benefited from reduced risks to the shadow-banking system of China, the South Pacific nation’s top trade and commerce partner. The Aussie had scraped its lowest value against the U.S. dollar since July 2010 on Friday of last week.
Concerns are spreading about the strength of the economy of Australia when held against dips of commodity markets as the Aussie is a commodity-linked currency, akin to the Canadian dollar.
Australian bonds set for maturity in 10 years advanced three basis points to check in at 4.05 percent after having fallen to their lowest value since the end of this past October.
Both the Aussie and the New Zealand dollar advanced about 0.7 percent against the greenback on Tuesday, according to Reuters. As the U.S. Federal Reserve prepares to convene two days of meetings beginning on Wednesday, foreign exchange markets are likely to be impacted.
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