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Forex - AUD/USD advances as U.S. debt deal boosts risk appetite

Published 08/01/2011, 03:20 AM
AUD/USD
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AUD/JPY
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Investing.com – The Australian dollar was higher against its U.S. counterpart on Monday, trading within striking distance of the pair’s post-float high after U.S. Congressional leaders reached an agreement to raise the U.S. debt ceiling, boosting demand for higher-yielding assets.

AUD/USD hit 1.1061 during late Asian trade, the pair’s highest since Thursday; the pair subsequently consolidated at 1.1049, gaining 0.50%.

The pair was likely to find support at 1.0934, the low of July 27 and short-term resistance at 1.1079, the high of July 27 and the pair’s highest since it was floated in December 1985.

President Obama and Senate leaders announced Sunday night that they had reached agreement on a framework deal that will cut spending and increase the USD14.3 trillion federal debt ceiling, in order to avert a U.S. default.

The Senate was expected to pass the deal which raises the debt ceiling and cuts about USD2.4 trillion from the deficit over the next decade.

The Aussie was also higher against the yen, with AUD/JPY surging 1.57% to hit 85.71.

Later in the day, the U.S. Institute of Supply Management was to publish data on manufacturing activity.

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