Foreign Currency Market

The reforms carry out by the government of Bob Hawke during the 80’s, marked the beginning of an economic reform process letting the Australian dollar float free in the year 1983. The desregulation of the financial market marked definitely the new rules that would rule the Australian economy since that moment on.
Nowadays not only the economic indicators are the ones that make foreign currencies prices move, as for example the Australian price, but also the ones called “commodities” (are the essential raw materials of our economy and of the world, and constitute one more investment alternative for different investors’ profile). The revaluation of raw material as gold, crude or corn have been part of the fall or raise of the value of the foreign currencies.This is because there is an effect produced in the world called “agflation” (agroinflation or increase of the agroproducts), caused by the major demand of raw materials that there is in the world.
The Australian dollar is not exempt from this situation and in these last weeks it has been favored by the high gold price (commodities), and the raise of the economic indicators. The raise of the construction index difused during the month of December has made the Australian dollar increase its value.
Niels From, monetary strategist from Dresdner Kleinwort at Francfort, said the following regarding to the actual situation on the Australian dollar. “Information that we have received from Australia were very important, and that is what is helping the Australian dollar, with the risk behaviour, help the carry trader”.
The Australian dollar was raising 1,2 per cent and was quoted at 96,38 yenes while it was also raising positions in front of the American currency and earned almost 1 per cent against the dollar, to start negotiating at 0,8790 dollars from the United States.