Australian dollar remains firm against sterling, but markets await this evening's US Fed announcement with anticipation

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Category: Australian Dollar News

Written by Rob Samson

The Australian dollar continues to dominate the pound sterling on the currency markets this morning.

At 10:40 AM in London, GBP-AUD has edged lower to 15429.

The aussie dollar remains firm amid positive risk sentiment, this largely driven by expectations for further stimulus measures at the US Federal Reserve.



That said, most of the gains were made yesterday, it would seem markets are today holding their ground in anticipation of the event.

The market is also being buoyed by various reports suggesting that EU and global leaders are treating the debt crisis with the urgency it demands.

Greece may be edging towards a coalition but the bailout terms renegotiation may be a tougher hurdle to clear.

"Sterling is trading just below 1.5450 this morning and we may see commodity currencies respond negatively to Fed this evening," says a morning FX note from Caxton FX.

Turning to the New Zealand dollar, a weak NZ trade balance data saw sterling climb a cent against the kiwi dollar.

Caxton FX say:

"New Zealand posted a wider than expected current account deficit last night and the kiwi dollar struggled as a result. We have another big figure out of New Zealand this evening, in the form of its first quarter GDP. The figure is expected to improve from 0.3% to 0.5% q/q.

"Clearly before that all eyes will be on the Fed this evening and given that we think the Fed will hold fire on QE3, this rate may head higher from its current 1.98 level."