Forex - AUD/USD rises to 7-day high on Greece hopes, China easing

Published 02/20/2012, 03:09 AM
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Investing.com - The Australian dollar rose to a seven-day high against its U.S. counterpart on Monday, as hopes that Greece will soon receive its second tranche of financial aid supported demand for riskier assets.

AUD/USD hit 0.8430 during late Asian trade, the pair’s highest since February 9; the pair subsequently consolidated at 1.0752, climbing 0.43%.

The pair was likely to find support at 1.0688, the low of February 17 and resistance at 1.0844, the high of February 8.

The risk-related Aussie found support as investors expected euro zone finance ministers to approve a much needed EUR130 billion bailout for Greece at a meeting in Brussels later in the day.

Without a bailout, Athens faces the threat of defaulting when a EUR14.5 billion bond redemption comes due on March 20.

Sentiment also strengthened after China cut the amount of cash banks must hold in their reserves on Saturday, boosting lending capacity in an effort to spur the world's second-biggest economy.

The Aussie was lower against the New Zealand dollar with AUD/NZD retreating 0.39%, to hit 1.2812.

Also Monday, official data showed that producer price inflation input in New Zealand rose more-than-expected in the fourth quarter, rising 0.5% after a 0.6% increase the previous quarter.

Analysts had expected PPI input to rise 0.4% in the fourth quarter.
In the U.S., markets remained closed for the Presidents Day holiday.


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