Settling Australian Market leads to Investment in Dollars

Investors told to avoid yen and buy Aussie.

Investors in the money markets are being advised to put their money into Australian dollars rather than the Japanese yen, as the currency is showing marked improvements compared to its Asian competitors.

Bloomberg reported yesterday that the Australian dollar was worth 78 yen at 15:30 New York time, its highest peak for the last three weeks and part of a continuing trend of growth for the currency. The dollar had jumped nearly two per cent in a 24 hour period as the markets rallied around the currency.

Strategists Meg Browne and Marc Chandler from the New York bank advised Bloomberg: “The Asian region, notably China, is continuing to show signs of picking up steam. At the same time, the yen is likely to remain under pressure in the coming week as improved earning help to boost equities and calm markets.”

With Australia exporting 25 per cent of all of its goods in May, it’s hardly surprising that recovery in China is having a positive trickle down effect in Australia. According to recent Post Office statistics posted this week, the Australian dollar is the fourth most bought foreign currency by UK residents. In the six months between January and June 2009, Australian dollars were only bested by the euro, US dollar and Turkish lira in terms of currency demand.

The rallying of the Asian markets has seen a huge increase in demand for currency from the Post Office in the last month. Five of the top ten fastest growing currencies in June came from Asia, with the Chinese yuan growing by 38 per cent and the Thai baht growing by 35 per cent.

By Carla Windsor posted July 24, 2009 4:22 AM with 1,154 views