$A continues rally after EU deal reached

On Friday 28 October 2011, 6:41 EST

The Australian dollar has continued its strong rally, climbing above 107 US cents after European leaders suprised markets and reached a breakthrough to resolve the eurozone debt crisis.
Eurozone leaders announced on Thursday (European time) a plan to shore up their bailout facility, pledging new funds for Greece and persuading banks to agree to major writedowns in an accord reached after two successive summits.
French President Nicholas Sarkozy announced at a summit in Brussels that eurozone leaders had agreed to leverage the 440 billion euros ($A591 billion) European Financial Stability Facility to one trillion euros ($A1.34 trillion).
At 0625 AEDT on Friday, the Australian dollar was trading at 107.39 US cents, up from 105.34 US cents on Thursday.
Boosting the Eurpopean bailout fund is a key element in the crisis response eurozone leaders have promised, along with making banks agree to write down billions in Greek debt and recapitalising the banking sector so it can absorb the hit.
The bailout fund, the main weapon against the crisis, has already flown to the rescue of Portugal and Ireland, and would be tapped in a new Greek bailout.
The news saw risk appetite recover, prompting equity and currency markets to surge.
No major local economic data was due on Friday.

6 comments

0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
ROMEO 3 minutes ago Report Abuse
Morons

Aussie is "flying high" at the moment fueled by "hot air" produced by pollies an it will soon blow up(appreciate) by real market...pain is still ahead,don't celebrate too early
Reply
1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
Mark 16 minutes ago Report Abuse
This dollar is killing me, barely surviving. What I earned yesterday is not what I'm going to be paid. But that said, our dollar is overvalued, it'll plummet again with the next crisis which it did a few weeks ago. Mining is only a small portion of the economy not the whole. As my financial advisor said, we are being lied to by the banks and government to keep foreign investment alive. The EU hasn't solved anything the problems are still there and other countries within following Greece, this band aid solution didn't help the US.
Reply
0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
Doni P 17 minutes ago Report Abuse
Two comments saying our dollar should be under parity with the US dollar, you guys obviously know more about commerce than me. Just wondering why? Is it better for our trading?
Reply
0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
Les R 29 minutes ago Report Abuse
Our dollar needs to be around $0.75US, only problem is the Oil companies will raise their prices even more sucking up any gains in made export dollars
Reply
1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
Richard 40 minutes ago Report Abuse
would have hoped the AUS$ would have fallen under parity by now. Not helping our exporters or encouraging investment here. Still this is the market and interest rate cuts are surely going to happen next week of 50 points 1/2% which is good news for homeowners and retailers.
Reply
0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this comment
43 minutes ago Report Abuse
hopefully our dollar will rise above $1.10 US where it should be
Reply

Thursday, 27 October 2011