The Australian dollar rose to the highest level in six years against its Canadian counterpart and gained versus the US currency on the outlook for the faster economic growth in China.
The Aussie and the loonie are both related to growth and considered to commodity currencies. Therefore they are generally driven by the same factors. The key reason for their different performance is their export markets. Australia mainly exports to Asia, particularly China, while Canada’s main trading partner is the US.
The difference between the US and China’s economies is obvious. The US is struggling to recover, while China tries to contain its rapid economic growth. Thus Australia and its currency can more easily benefit from the factors, which favorable to the growth currencies. Canada’s currency, on the other hand, weakened not just by the foreign influence but also by the signs of the softer economy in Canada itself.
AUD/USD rose from 0.9676 to 0.9686 as of 19:28 GMT today. It currently shows tendency to decline, although it advanced previously to 0.9728. AUD/CAD jumped from 0.9959 to 1.006 after rising to the intraday high of 1.0018. The last time the Australian and Canadian dollar were at parity was in 2004.
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