The Australian dollar rallied from a three-month low reached yesterday after finance ministers in Europe declared the regionâ€™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 areaâ€™s 17 nations set up a full-time fund to aid the regionâ€™s debt-ridden countries. Prices for iron ore, Australiaâ€™s key export, rose yesterday to the highest in more than a month. Demand for New Zealandâ€™s dollar was tempered after a report today showed charge-card spending fell more than economists forecast.
â€œThereâ€™s a lack of bad macroeconomic news out there to push the Aussie lower,â€ said Andrew Salter, a strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) â€œAnything that takes a euro catastrophe out of the equation is positive for risk sentiment.â€ Gains in iron prices have also underpinned the Aussie, he said.
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