Australian Dollar Rallies From 3 Month Low to above 1.02 on Europe Fund and Iron Ore

The Australian dollar rallied from a three-month low reached yesterday after finance ministers in Europe declared the region’s permanent aid fund operational and gains in commodity prices boosted demand for the currency.

The so-called Aussie climbed versus its U.S. counterpart following a slide last week that was the biggest in five months, after finance ministers from the euro area’s 17 nations set up a full-time fund to aid the region’s debt-ridden countries. Prices for iron ore, Australia’s key export, rose yesterday to the highest in more than a month. Demand for New Zealand’s dollar was tempered after a report today showed charge-card spending fell more than economists forecast.

“There’s a lack of bad macroeconomic news out there to push the Aussie lower,” said Andrew Salter, a strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) “Anything that takes a euro catastrophe out of the equation is positive for risk sentiment.” Gains in iron prices have also underpinned the Aussie, he said.

via Bloomberg

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