19 Nov 2013
Commodity currencies rise on expectations of continuing easy money
FXstreet.com (London) - Commodity currencies have continued to rise today on expectation of continued liquidity support from the US Federal Reserve.
The Aussie dollar climbed to highs of USD0.9444 today, currently up 0.38 percent at USD0.9413. The Kiwi dollar climbed to a high of USD0.8372, currently up 0.14 percent at USD0.8341.
The strength in the Australian dollar comes despite minutes released overnight from the Reserve Bank of Australia that show continued concern over a strong Aussie dollar putting exports under pressure. While the RBA had held cash rates allowing time to gauge the effects of previous cuts, it said that would not “close off the possibility of reducing it further”.
Although the Aussie dollar dipped slightly on the comments, the market consensus is that the central bank will not be overzealous in cutting rates.
Continuing easy money
While also boosted by talk of further Chinese currency liberalisation, commodity currencies have crept up on expectation of an underlining of the Fed’s commitment to ultra-loose monetary policy when Ben Bernanke speaks at 7pm EST.
Risk was given a boost when Bernanke’s appointed successor, Janet Yellen, took the stance that the Fed still had a key role to play in the US economic recovery when speaking before the Senate committee on Banking, Housing and Urban Affairs as part of her confirmation hearing. Her comments in a pre-released speech followed by a Q&A in the senate reinforced expectations that the Fed will be cautious in any tapering of its USD85bn-a-month asset purchase programme.
The Aussie dollar climbed to highs of USD0.9444 today, currently up 0.38 percent at USD0.9413. The Kiwi dollar climbed to a high of USD0.8372, currently up 0.14 percent at USD0.8341.
The strength in the Australian dollar comes despite minutes released overnight from the Reserve Bank of Australia that show continued concern over a strong Aussie dollar putting exports under pressure. While the RBA had held cash rates allowing time to gauge the effects of previous cuts, it said that would not “close off the possibility of reducing it further”.
Although the Aussie dollar dipped slightly on the comments, the market consensus is that the central bank will not be overzealous in cutting rates.
Continuing easy money
While also boosted by talk of further Chinese currency liberalisation, commodity currencies have crept up on expectation of an underlining of the Fed’s commitment to ultra-loose monetary policy when Ben Bernanke speaks at 7pm EST.
Risk was given a boost when Bernanke’s appointed successor, Janet Yellen, took the stance that the Fed still had a key role to play in the US economic recovery when speaking before the Senate committee on Banking, Housing and Urban Affairs as part of her confirmation hearing. Her comments in a pre-released speech followed by a Q&A in the senate reinforced expectations that the Fed will be cautious in any tapering of its USD85bn-a-month asset purchase programme.