The Australian dollar rallied against all other most-traded currencies this week without any noticeable opposition as the economic recovery boosted commodity prices and caused Australia’s central bank to revise its growth forecast upwardly.
The economic recovery was evident as the macroeconomic data from countries all around the world was generally positive. The economic reports from Australia itself were also good, including the reports about surging building approvals and widening trade balance. The strong economic growth is positive for the Aussie, as the Australian currency is often called, as its performance is linked to the growth and commodities.
The Reserve Bank of Australia confirmed the economic growth, saying in its statement: “The global economy grew at an above-trend pace in 2010 and a continuation of strong growth is expected over the next couple of years, albeit with some moderation in the pace.” The Bank also said that its “medium-term outlook continues to reflect the expected strong growth in mining investment and high commodity prices” and increased its growth forecast for 2011 from 3.75 percent to 4.25 percent, anticipating “the recovery in coal production from the effect of the floods”.
AUD/USD rallied from 0.9891 to 1.0141 this week. EUR/AUD dropped from 1.3724 to 1.3394, while AUD/JPY rose from 81.25 to 83.35. AUD/NZD were rising for the whole week, jumping from 1.2852 to 1.3187. AUD/CAD performed somewhat weaker, declining from its weekly high of 1.0095 as the Canadian currency has also strengthened this week, but managed to close above the opening price of 0.9900 at 1.0021.
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