Aussie Advances against Major Peers on Possibility of ECB Monetary Stimulus

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Aussie Advances against Major Peers on Possibility of ECB Monetary StimulusThe Australian dollar advanced against its major counterparts on Wednesday as traders weighed in the possibility that the European Central Bank may boost stimulus in order to deal with the persistent deflation.

The Australian dollar rose to 1.0873 versus the New Zealand dollar, a 2-day high. It also rose to 0.9408 against the U.S. dollar, the most since April 15. It also rose to 96.10 yen, a level last touched in April 23. The Australian currency also rose to 1.4579 against the euro, its highest since November 2013.

The Aussie, which closed at 1.0202 against the Canadian dollar on Tuesday, rose to its highest level in over two weeks of 1.0263, reported RTT News.

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The Aussie rose after the Germany’s central bank revealed it will support any measures by the ECB to stimulate the euro zone’s economy, such as asset-buying program, negative interest rates. The ECB President Mario Draghi hinted last week at the possibility of monetary easing when it meets this June, something that is dependent on inflation estimates.

On the other hand, the Egyptian pound fell today during the exceptional foreign exchange auction of $1.1 billion that is targeted at paying for essential food imports. The cut-off price at the sale was set by the central bank at 7.0950 pounds per dollar, a decline of 5 piastres from the last forex exchange auction held last Monday, when the exchange rate stood at 7.0451.

The central bank didn’t reveal whether all foreign currency placed for sale were sold, reported Reuters. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com