The Australian Dollar pushed higher for a second consecutive day on Tuesday against the Pound and maintained its biggest one-day gain in a fortnight against the US Dollar after investors raised their bets that the Oceanic currency’s recent declines have been overdone.
As a result the currency edged away from multi-year lows against a number of peers after technical indicators signalled that its recent run of declines has been excessive.
“The Aussie is looking pretty oversold. Positioning does look quite stretched and the Aussie does look low in relation to short-term fair value estimates,” said the global co-head of currency strategy at National Australia Bank Ltd. in Sydney.
The currency is now not expected to fall to the 84 US cents mark until April.
The currency was also supported by positive economic news. The National Australia Bank’s monthly business-conditions index rose to +4 in December, up from the figure of -3 seen in November. The data could prove to be a turnaround for the flagging Australian economy.
“The Reserve Bank would be encouraged by the way the economic recovery is panning out. The low Australian dollar is helping with the structural re-balance across the domestic economy,” CommSec chief economist Craig James said.
The policy setting board of the Reserve Bank of Australia meets on February 4th and is expected to keep its cash rate at a record low 2.50%.
Sterling is forecasts to push higher as the session progresses after data confirmed that the UK economy expanded in the fourth quarter of 2013. On a quarterly basis GDP rose by 0.7%, on a yearly basis it expanded by 2.8%.
Current Australian Dollar Exchange (AUD) Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8804 ,
Australian Dollar,,British Pound,0.5305 ,
Australian Dollar,,Euro,0.6445 ,
Australian Dollar, ,New Zealand Dollar,1.0627 ,
[/table]
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