China and US Fed Will Guide the Australian Dollar

Market euphoria has driven Australian shares to fresh multi-year highs but some analysts are warning that the factors that weighed on equities earlier this year haven’t really gone away.
Post-election cheer has seen Australian stocks rally over 2 percent since the federal elections were called on September 9, while the Australian dollar has risen around 1 percent.
News that Larry Summers dropped his bid to succeed Ben Bernanke as Fed Chairman added fuel to the fire, sending Australian shares to their highest level on Monday since May 2008.

Sentiment surrounding the Australian economy has turned markedly bearish this year amid speculation of a peak in the country’s mining sector, slowing demand from major trading partner China and ongoing political uncertainty.
However, more positive economic data out of China in recent weeks coupled with the euphoria of a new Liberal National coalition government have started to fuel hopes that the economy could be getting back on track, leading to gains for the domestic stock market.

via CNBC

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