The reassurance by the governor of the People’s Bank of China to Europe and the world showed a sudden enhancement in the performance of the Australian dollar in earlier trading. The governor assured that China is still committed to investing in the euro as an asset. The spread of this news helped in increasing the risk appetite in time of insecurity in the market. Apart from this, the Reserve Bank of Australia has also extended its helping hand towards the Aussie Dollar and continues to be careful about cutting interest rates.
The postponement of the Greek debt deal again has undoubtedly increased the tension about the Eurozone. Showing his optimism, PBOC Governor Zhou Xiaochuan remained confident of Eurozone’s efficiency in winning through the troublesome situation. He also repeated and stressed on China’s continuing support for the Euro. This encouragement boosted the Aussie though it remained unsuccessful in taking euro much higher against the US dollar.
RBA’s role can’t be undermined as RBA officials’ reluctance to cut interest rates has proved beneficial for the Aussie. Australia’s determination not to simplify the monetary policy has heightened the hope among those who think that the economy Down Under will continue to be strong. Apart from this, shooting gold prices are also proving as a boon for the Australian dollar.