The Australian dollar advanced against the Japanese yen, reaching the highest price in 10 months, and its US peer on positive sentiment among Forex traders. The currency fell a little versus the euro.
The Forex market is shifting from downbeat mood to cautiously optimistic as attention of traders turns from the debt-laden European countries to the United States. The US economy shows signs of robust recovery, allowing investors to feel more comfortable amid economic slowdown in other parts of the world. Additionally, hopes remained that the eurozone will emerge from its crisis intact, although a bit battered.
The Australian dollar and other currencies with high yield also rose against the yen and the greenback on the speculation that the central banks will take steps to weaken the US and Japan’s currencies. The Bank of Japan was continuously trying to stem yen’s gains and signaled that it’s going to repeat its attempts. The Federal Reserve refrained from a next round of quantitative easing, boosting the US dollar, but yesterday’s economic data, that was worse than expected, suggested that additional stimulus may yet be required.
AUD/USD rose from 1.0526 to close at 1.0588, while AUD/JPY climbed from 87.92 to 88.29, reaching 88.57 intraday — the highest since May 3. EUR/AUD was up from 1.2422 to 1.2436.
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