Aussie Dollar Up On Investor Interest
May 1st, 2012
THE Australian dollar has risen slightly, following a drop in response to a rate cut decision by the central bank.
At midday AEST today, the local unit was trading at 103.37 US cents, up from 103.24 yesterday afternoon.
Since 7am AEST today, the Australian dollar traded between 103.26 US cents and 103.43 cents.
Nomura head of foreign exchange Kurt Magnus said the rebound from yesterday's fall showed the resilience of the Australian dollar as an attractive currency for European investors.
"Last night is a classic example of what's going to happen with the Australian dollar in 2012," he said.
"There's a continued movement of money from Europe into high-yielding Asia.
"Every single dip is an opportunity to invest."
This trend meant the local currency was able to withstand concerns around global growth as well as any negative developments in domestic markets.
"The lowest New York close in the Australian dollar this year has been 102.28 (US cents)," he said.
"Look at what we've had thrown at it - Greece, Spain, concerns around China's growth, and then a 50 basis point (official interest rate) cut.
"I think we are going to have to get used to a higher Aussie for a lot longer."
Yesterday afternoon, the Reserve Bank of Australia decided to drop the cash rate by an unexpected 50 basis points to 3.75 per cent.
The Australian dollar fell more than half a US cent on the news.
Meanwhile, Australian bond future prices were higher at noon.
At midday AEST today, the June 10-year bond futures contract was trading at 96.425 (implying a yield of 3.575 per cent), down from 96.510 (implying a yield of 3.490 per cent) yesterday.
The June three-year bond futures contract was at 97.110 (2.890 per cent), down from 97.190 (2.810 per cent).