Aussie Increases to the Highest Level against USD in 2 Weeks

Australian Dollar, also known as Aussie has increased to the highest level in last 2 weeks against USD as the Federal Reserve is set to open up a two-day meeting and many are speculating that it will be maintaining bond purchases for foreseeable future. Not only against USD, but Aussie increased against most of its major peers as well. The Asian stocks gained on today and data showed that the private sector showed jump in last March as well. On the other hand, the demand for the New Zealand Dollar was sort of limited as the building approvals of the country quite unexpectedly declined in last month, thereby easing the pressure on the Reserve Bank of the country for tightening the monetary policy of the same.

According to the Strategist of Westpac Banking Corp., Jonathon Cavenagh, it is possible that there will be more reserve diversification flowing into different currencies such as the Aussie. At this point of time, the general consensus is that the Federal Reserve will stay sort of dovish. However, many economists are not sure whether the quantitative easing is going to be maintained or not. However, if the same is going to be stepped up, that will mainly happen because of the recent selloff of USD.

At one point of time on today, Aussie touched $1.0372, marking its highest level since 17th April. The currency is currently trading 0.1% higher than its yesterday’s value and it is at $1.0358. The currency has therefore trimmed the monthly decline to 0.6%. Against New Zealand Dollar, Aussie has jumped up by 0.2% and is currently valued at NZ$1.2105. On the other hand, the New Zealand Dollar has declined by 0.1% against USD and is currently valued at 85.57 US Cents.

The Government bonds of Australia increased, with the yield on the 10-year debt declining by 1 basis point. It is currently at 3.09%. At one point of time, it touched 3.077%, thereby matching the lowest value that it experienced on 19th November. Apart from that, the 3-year rate declined to 2.57%, which is the lowest level since 3rd December.

The MSCI Asia Pacific Index of the stocks jumped up by 0.8% on today. Other than that, the MSCI World Index posted a gain of 0.7% on yesterday too. Incidentally, the Federal Reserve meeting will end on tomorrow.