The Australian dollar advanced as global stocks and commodities rallied on prospects of an interest rate cut by the European Central Bank. Positive fundamentals in Australia also helped the currency.
Riskier assets continued to rise on prospects for measures from the ECB that should spur economic growth. The Standard & Poor’s GSCI Spot Index of 24 commodities jumped as much as 3.5 percent, reaching the highest level since May 29. The Standard & Poor’s 500 Index advanced 0.6 percent.
Economic reports also provided support for the Australian currency. Building approvals climbed 27.3 percent in May from April, when they fell 7.6 percent. The Reserve Bank of Australia kept its main interest rate unchanged at 3.5 percent. The bank was fairly optimistic about the state of the Australian economy:
In Australia, recent data suggest that the economy continued to grow in the first part of 2012, at a pace somewhat stronger than had been earlier indicated. Labour market conditions also firmed a little, notwithstanding job shedding in some industries; the rate of unemployment remains low.
AUD/USD climbed from 1.0247 to 1.0282 and remained near that level as of 4:24 GMT today. EUR/AUD dropped from 1.2259 to 1.2234, reaching 1.2202 earlier — the lowest level since February. AUD/JPY climbed from 81.45 to 82.03 on the previous trading session and remained near that level today.
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