Australian dollar update 19/10/2011

[John from Moneycorp]

The Aussie dollar was last week's top currency performer. Investors excited at the prospect of an overdue solution for the European debt crisis forgot their concerns about global growth and went in chase of those currencies linked to commodity exports and high interest rates. The Australian dollar ticked both boxes.

 

Adding to its attractions were a couple of positive economic data. NAB's business survey found firms more upbeat about current and future trading conditions while Westpac reported another improvement in consumer confidence. The employment figures for September were better than expected, with more than 20k jobs created and a fall in the rate of unemployment to 5.2%.

 

The minutes of the Reserve Bank of Australia's monetary policy meeting come out on Tuesday morning. They might shed more light on the likely direction of interest rates. Otherwise, it will be developments – or the lack thereof – in Europe that have the most influence on the AUD's direction.