Australian Dollar Trades Near 3-Week High Ahead of Fed Decision

The Australian dollar traded 0.4 percent from the highest level in three weeks as speculation the Federal Reserve may signal further stimulus supported demand for riskier assets.

The so-called Aussie and New Zealand’s dollar maintained two days of gains after Germany’s top constitutional court cleared the way for the ratification of the euro area’s permanent bailout fund yesterday. New Zealand’s currency, known as the kiwi, was close to a more than four-month high after the Reserve Bank kept its benchmark interest rate unchanged today.

“The markets are seeing a good chance that the Fed will announce QE3 today,” Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, a unit of Japan’s biggest listed bank, said, referring to a third round of asset purchases known as quantitative easing. “That’s lending support to risk currencies like the Aussie and kiwi.”

via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.