Australian Dollar benefit against its peers

Australian Dollar benefit against its peers

Concerns over the upcoming Euro summit has seen the US Dollar benefit against its peers. Investors have little faith that Europe’s leaders will be able to come up with a solid plan for ending the regions ongoing crisis. The Australian Dollar was close to a two week high against the Euro yesterday and along with the Yen is up against a basket of currencies. Investors continue to seek secure safe havens for their cash and with the Euro crisis being nowhere close to being resolved risk appetite has waned.

There are vague proposals on the table for discussion towards a closer fiscal union but frankly it is tough to see anything concrete coming out of the summit," said Chris Walker, currency strategist at UBS.

"Given the markets are already bearish on the euro, there is a risk of a short squeeze, but that would be good opportunity to sell the euro."

As of this morning the Australian Dollar is trading in the region of 79.471 against the Japanese Yen. Today is relatively quiet for European economic data and so the focus falls onto the Australia. The key information to look for today is the Richmond Fed Manufacturing gauge which will give traders an indication of how the world top economy has performed this month. Its outcome will undoubtedly affect the markets.

“We expect a disappointing outcome from the EU leaders’ summit, so therefore we think that the euro may weaken into the week’s end,” said Richard Grace chief currency strategist and head of international economics in Sydney at the nation’s biggest lender. “The ‘Greenback’ is going to remain quite firm.”

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