Australian Dollar Expected To Be Top Performing G10 Currency

Post by Sharat on March 5, 2010 · Under Australian Economy, Business News, Forex · Comment 

As Australia’s economy continues to recover, the Reserve Bank of Australia remains in tightening mode, and commodity prices strengthen, many market analysts are predicting that the Australian dollar will be the G10 currency of choice in 2010.

After falling at the start of the year, the Australian dollar has rallied of late, surging back to above US90c and many analysts expect the Aussie to achieve parity with the greenback before the year is out.

Currency analysts from Citigroup say they believe that when measured against its G10 rivals, which include the US Dollar, Pound Sterling, and Euro, the Australian dollar is expected to be a top performer.

“The Australian dollar may well be the G10 currency of choice in 2010,” Citi currency strategists said.

Paul Brennan, chief economist for Citigroup says that the Aussie has strong fundamentals in its favour.

“The market has actually been raising its forecasts for the increases that are likely to be agreed on the (contract prices for) coal, so that supports the Australian dollar. You have the Reserve Bank continuing to raise interest rates while other countries are unlikely to in the near term; and then from a risk appetite point of view there has been progress in dealing with the financial crisis in Greece, and that is helping to support risk appetite.” Mr. Brennan said.

The dollar also rose to its highest point in a decade against the New Zealand dollar yesterday, hitting $1.31 in the morning.

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