The Aussie Dollar had another good last week against a basket of major currencies and in particular the US Dollar. The Dollar drew most of its strength from renewed carry trades with investors seeking high returns in what is now seen as a relatively safe haven of the high yielding Aussie Dollar. The movement sparked the Aussie into reaching 24 year highs against the US Dollar, 2 year highs against the Kiwi and 2 month highs against the Yen.

Last week saw the Reserve Bank of Australia release minutes from the previous interest rate meeting where rates were left unchanged at 7.25%. Despite keeping rates on hold the minutes did show that members considered carefully the case for raising rates, indicating that they are still concerned about controlling inflation. The Aussie Dollar was also supported by firmer commodity prices and precious metal prices with gold in particular pushing up after a recent wide scale sell off.

With interest rates in Australia on hold at the moment the outlook for the Aussie Dollar against Sterling remains the same. The economy in Australia is robust, it is showing good growth and there is a strong demand for the currency, especially from overseas investors. The currency continues to strengthen against the dwindling Pound; however, with a psychological barrier of $2 approaching, the question is whether it has enough momentum to push through it.