The Australian Dollar edged up against the US Dollar and maintained a third day of gains against the Japanese Yen after concerns over the health of China’s banking sector were eased by the Chinese Central Bank.
China’s Central Bank reassured investors that it will do what it takes to stabilize money markets and ease the credit squeeze threatening the world’s second largest economy and Australia’s biggest trading partner. The Bank announced that it has provided extra liquidity to some financial institutions in a bid to stabilize money market rates.
Westpac senior currency strategist Sean Callow said the statement allayed earlier concerns about a Chinese credit crisis, as the authorities crack down on dubious lending practices.
“You got that statement from the People’s Bank of China, finally breaking their silence, on what was going on in the money markets and playing down the market’s concerns that growth might be damaged by the rise in money market rates,” he said.
The Australian currency is still expected to post further declines before the end of the year as economists predict the nation’s economy will begin to slow over the next few months as the mining boom comes to a close and as China continues to post weaker than expected data.
The currency could face volatility from political uncertainty in the country. Former Prime Minister Kevin Rudd has announced that he will challenge current PM Julia Gillard for the leadership of the in power Labour party.
Australians head to the polls on September the 14th and it was expected that the opposition leader Tony Abbott would win a landslide. If Rudd wins the right to stand for Labour party leader that could change things as he is regarded as far more popular than Gillard and could put up a better electoral fight.
Current Australian Dollar (AUD) Exchange Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9294 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7108 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6034>
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4162 <
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8349 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0758 <
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6571 <
Correct as of 09:45 am GMT
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