The second push over the one to one value mark came from an unexpected Reserve Bank of Australia (RBA) decision to raise the interest rate 25 basis points to 4.75 per cent. For the past 6 months the RBA have kept the rate unchanged.
But the real driving force behind the rallying Aussie has been the broad weakening of the US currency. The Australian Dollar has appreciated by more than 50 per cent since March 2009.
The recent announcement by the US Federal Reserve of a second round of quantitative easing further boosted the Australian Dollar. This round will see the Federal Reserve spending an estimated $US 600 billion in an attempt to resuscitate the flailing US economy.
"Going forward this week, it’s all about what happens with the US dollar. And that goes for all crosses," said a Sydney-based trader.
The Australian Dollar ended the week with little fluctuation from its above parity level. The market is waiting on the release of US payroll data, a key indicator of US unemployment. Head of currency strategy for National Bank of Australia, John Kyriakopoulos said, “We’re very beholden to the message on the health of the US economy that we get from the payrolls report.” Mr Kyriakopoulos said if the payroll number is strong, the Australian Dollar will weaken, and if the data is weak the Australian Dollar will see further record highs against the US Dollar.
AUD/ GBP: 0.6256
AUD/ EUR 0.7163
AUD/ USD: 1.0118
AUD/ JPY: 81.7407
Exchange rates as of 11:00, 5th November 2010
Brought to you by 1st Contact Money Transfers
Note: The above exchange rates are based on "interbank" rates. If you want to transfer money to Australia then please register/login or call us for a live dealing rate. Make use of a Rate Notifier to send you alerts when the Australian exchange rate reaches levels you are looking for.