Australian dollar aided by return to risk appetite

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Category: Exchange Rates

Published on Tuesday, 23 August 2011 09:48

Written by Will Peters

Australian dollar makes gains, but the turbulence on financial markets remains.

Australian dollar

Risk appetite returned to aid the aussie dollar yesterday, as did some positive comments from Federal Treasurer Swan.

"Risk appetite returned yesterday, though we have seen this before in the last fortnight, only for confidence to collapse once more. HSBC Chinese manufacturing data came in slightly better than expected, which is a positive for demand for Australian exports," says Richard Driver at Caxton FX.

Elsewhere, Australian Treasurer Swan confirmed that there will be no government intervention in the strength of the Australian dollar.

Turbulent week on financial markets

Meanwhile investors and traders are braced for another turbulent week on the financial markets amid growing concerns about the eurozone debt crisis and global economic downturn.

Attention is focused on the banking sector, hit by fears of a new credit crunch and speculation that some European banks are finding it difficult to borrow from international lenders, says the Daily Express.

Bankers warn on over-regulation

Meanwhile the British Pound could face further pressure as bankers have warned that billions of pounds of lending to business could be put at risk if policymakers press ahead with "uncosted" plans to tighten banking regulations.

As the industry awaits the final report of the Government's Independent Commission on Banking with increasing trepidation, the British Bankers' Association yesterday said it feared that tightening the rules on banks had become Britain's top priority, ahead of even securing the economic recovery, the Independent Reports.