The Australia Dollar has strengthened against most of its peers thanks to speculation that the newly elected Japanese government will increase spending in a bid to get the nation’s economy back on track.
Japanese Prime Minister Shinzo Abe has made reviving Japans stalled economy his top priority since taking office on December 26th. He revealed that he would implement a strong bout of quantitative easing in an effort to weaken the Yen and make the nation more competitive.
“Considering the relatively deep economic ties, an accelerated rebound in Japan’s economy will be positive” for the Australian currency, said Kengo Suzuki, a strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. Suzuki said he is “bullish” on the Australian Dollar.
The Australian Dollar also benefited from an improving picture emerging out of China. Demand for one of Australia’s biggest exports,Iron Ore has pushed the value of the commodity upwards by as much as 70%.
Australia seems to have shrugged off the concerns over the fading mining boom that threatened to weigh down the economy with the Australian Bureau of Statistics expected to reveal that retail sales increased by 0.3% in November from a month earlier and that the number of new building permissions rose by as much as 3%.
The Australian currency is expected to continue to enjoy strong support over the next few weeks as it is helped by a mix of improving exports, commodity prices and improving investor sentiment.
The Pound to Euro exchange rate is currently trading at 1.2314
The Pound to US Dollar exchange rate is currently trading at 1.6058
The Pound to Australian Dollar exchange rate is currently trading at 1.5292
The Euro to US Dollar exchange rate is currently trading at 1.3037
The Euro to Pound exchange rate is currently trading at 0.8118
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