Export prices, euro news help boost currency
San Francisco, CA -- (SBWIRE) -- 10/15/2012 -- The launch of Europe’s aid fund and a rise in commodity prices Tuesday helped drive the Australian dollar up from a three-month low on Monday.
Australia’s top export, iron ore, enjoyed a boost in price to its highest point in over a month.
The Australian dollar strengthened against the U.S. dollar after European nations declared that a fund intended to shore up debt-laden countries was operational. The Aussie last week had suffered its steepest decline in five months.
The New Zealand dollar did not fare as well after credit-card borrowing dropped more than observers had expected. Rising prices of iron helped the Aussie, said Andrew Salter, a strategist for Australia & New Zealand Banking Group Ltd.
“There’s a lack of bad macroeconomic news out there to push the Aussie lower,” Salter, of Sydney, told Bloomberg News. “Anything that takes a euro catastrophe out of the equation is positive for risk sentiment.”
On Monday, the Aussie reached its lowest point since July 13, at 1.0149 U.S. dollars, but Tuesday it gained 0.4% to hit 1.0231 U.S. dollars.
Iron ore with 62% content enjoyed its best close since Aug. 16, according to The Steel Index Ltd., rising 6% to 110.40 U.S. dollars a ton at Tianjin, China. China is Australia’s largest trade partner.
The International Monetary Fund has reduced its forecasts for global growth, cooling gains for currencies in the South Pacific. The IMF expects 3.3% growth in the world economy this year and 3.6% in 2013. Those forecasts are down from 3.5% for 2012 and 3.9% for 2013 predicted in July.
A survey by National Australia Bank Ltd. has found business confidence improving from an negative measure in August. The bank surveyed over 400 companies from Sept. 18 to Oct. 1.
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