Aussie Gains as Australian Economy Improves

The Australian dollar rose today against 15 of 16 most-traded currencies as the reports showed that the private capital expenditures increase and the leading indicators rose in December.

The seasonally adjusted capital expenditure rose 1.3 percent in the last quarter of 2010. The growth was slower than in the previous quarter because of the impact of the flooding in Queensland. The Conference Board Leading Economic Index increased 0.7 percent in December. That’s compared to 0.2 percent in November.

The good reports, despite the natural disaster in December, spurred the bets that the Reserve Bank of Australia will rise the interest rates this year. Central bank’s Governor Glenn Stevens cautioned, in his speech at the Victoria University Public Conference on The Resources Boom, about being to optimistic for the Australian economy as nobody can predict when the rise in prices for natural resources, which supports the nation’s economy, will stall or turn to decline.

AUD/USD rose from 1.0022 to 1.0077 as of 5:03 GMT today, following yesterday’s advance from 0.9986 to 1.0022. EUR/AUD declined from 1.3714 to 1.3666.

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