Australian dollar update 25/10/2011

[John from Moneycorp]

The Australian dollar took fourth place in the hierarchy of major currencies but was only a little down from the top three; the franc, the yen and the pound. While investors were not afraid of the antipodean commodity dollars, neither were they eager to stock up with them while the Euroland debt resolution was in the balance.

The Australian economy had almost nothing to say for itself during the week. The minutes of the Reserve Bank of Australia's monetary policy meeting offered no guidance as to how the coming meeting might go. Analysts believe this week's core inflation figures, for the September quarter, could be the deciding factor. At least as important to the Aussie, however, will be that Euroland summit meeting on Wednesday. If it rekindles worries about a return to recession the AUD will feel the downward pressure.

[John from Moneycorp]

The Australian dollar has strengthened after a resolution was reached last night to help resolve the eurozone’s government debt crisis.

Leaders in Europe have reached an agreement which is regarded as vital in order to help solve the huge debt crisis in the region.

One of the main aims of the deal is to prevent the crisis spreading to larger eurozone economies like Italy.