According to John Curran, a currency dealer at Canadian Forex Ltd, investors are searching for clues of third round of quantitative easing, which is giving them some room to take some risk. Further, consumer confidence in Australia advanced by 3.7 percent this month to reach 99.1 percent according to a report by the Westpac Banking Corp-Melbourne Institute released yesterday. The economic conditions in Australia seems to be gaining momentum as another report released earlier this month showed an increase in home-building approvals in May. However, global stocks prices are affecting the currency that is also affected by the economic conditions in Europe and in China.
In a bid to encourage currency trade between Chinese and Australian currencies, the Australian Treasurer Wayne Swan has been involved in talks with China on how to encourage such trade. He is in China this week where he is set to discuss the possibilities of direct convertibility between the Australian dollar and Chinese Yuan for direct transactions carried out in mainland China. The current trade goes through the dollar.
The Australian dollar advanced by 0.7 percent against the euro to trade at A$1.19354 per euro and climbed by 0.6 percent against the dollar to trade at $1.0251. It also gained against the yen by one percent to exchange at 81.77 yen. The kiwi gained by 0.3 percent against the UD dollar to trade at 79.65 US cents and appreciated by 0.7 percent against the yen to exchange at 63.53 yen.