Australian dollar and sterling slug it out at 1.5 level on a morning that AUD-USD surges higher once more

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Category: Australian Dollar News

Written by Rob Samson

International Money Transfers at our sister site

The morning news and review of the Australian dollar.

The Australian dollar (Currency:AUD) is being bid higher by the pro-risk attitude amongst investors this morning.

With little by way of substantive data this morning it is left to the ebb and flow of the newswires to keep us entertained. The latest focus concerns the ECB and whether or not it will buy Italian and Spanish debt.

The pound Australian dollar exchange rate is 0.23 pct down on a day-by-day basis at 1.5001. This is proving to be a really sticky area for this pair, and understandably so. 1.5 is a psychologically significant number, and we would expect further stickiness here.


The Australian dollar to US dollar rate is 0.58 pct higher at 1.0505.

On the Aussie news front we see the Reserve Bank of Australia meeting minutes revealed that the central bank believes current monetary policy is appropriate and importantly that an interest rate cut was not required.

The central bank is still examining the effects of past rate cuts.

There was a also mention of the Swiss National Bank buying AUD, which has been taken positively.

"Sterling has rapidly lost ground to the aussie dollar this morning and there is likely to be further downward momentum as Europe and the US respond to last night’s minutes. For now, this pair trades at 1.50," says Richard Driver at Caxton FX.

Elsewhere, AUD/USD had probed to 1.0469 in yesterday's London morning session, dipping no lower than 1.0435 in quiet New York trade.

NZD/USD traded 0.8075 – 0.8105.

"AUD’s resilience came despite benchmark iron ore prices dropping below $110/tonne for the first time since Dec 2009," notes a morning FX comment from Westpac.

COMEX copper dropped -1.4%, Brent crude oil was choppy but finally little changed at $113.70/bbl and gold recovered from a slide below $1612 to steady at $1620/oz.

The kiwi dollar has followed the AUD’s lead in the aftermath of the RBA minutes, making some decent gains.

New Zealand’s inflation expectations data for Q2 came in slightly lower at 2.3%, which represents a three-year low. Still, the kiwi dollar was largely unaffected and was free to benefit from the improved sentiment towards the AUD last night. Risk appetite has seen a real bounce this morning, which is pushing this pair much lower.

"GBP/NZD is trading a cent lower at 1.9350 this morning and the current positive trading conditions could weigh on sterling further in the short-term," says Driver.