Friday, 14 October 2011

Eurozone optimsm puts $A back on track aap

Eurozone optimsm puts $A back on track

aap
On Friday 14 October 2011, 14:07 EST
The Australian dollar moved back above parity with the US dollar this week as optimism grows that there will be a solution to the eurozone debt crisis.
The local unit started the week at 97.39 US cents, has gained over four US cents since Monday and is trading at its highest levels in three weeks.
It briefly put its head above the 100 US-cent mark a few times on Tuesday and has stayed above parity since Wednesday evening.
Optimism early in the week came after German Chancellor Angela Merkel and French President Nicolas Sarkozy vowed to find "a lasting, global and quick response to the crisis before the end of the month".
There was further optimism on Wednesday night (AEDT) when Slovakian politicians agreed to hold a second vote to approve the changes to the European bailout fund, after an initial vote failed.
As of Friday morning, all 17 eurozone countries have now ratified the revamped bailout fund after Slovakia passed its bill.
CMC Markets foreign exchange dealer Tim Waterer said he was confident the Australian dollar could stay above parity in coming weeks, provided there was no negative news on the European crisis.
"Obviously there are some potential issues lying in wait. If plans from Germany and France don't materialise by the end of October or early November, that's going to get the markets edgy again," he said.
Australia's run of strong economic data in recent weeks would also help the local unit stay high.
"The longer the run we can have without negative data coming out, that will help the Australian dollar's chances of remaining above the parity level," he said.
"So a 102 US cents to 103 US cents range is within sight in the next week."

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