AUD Shows Modest Gains Against the USD, Trading at Around 67 US Cents

Must Read

The Australian dollar (AUD) has seen a slight boost on Monday morning as it trades against the US dollar (USD). It traded close to its nearly two-week high, at around US$0.6730.

This comes in the wake of a positive start to the week, with a government-brokered deal for UBS to purchase Credit Suisse being announced. 

Banks up despite market pullback but led by UBS – RBA

Despite the negative sentiment in local markets, risk-sensitive Aussies found some support due to a solid rebound in US equity futures. After a volatile trading session, S&P 500 closed 0.8 per cent higher, and the Euro Stoxx 600 rose 1 per cent, with most sectors in the green. UBS shares were down as much as 16 per cent during early trading but managed to close up 1.3 per cent.

The Reserve Bank assistant governor Christopher Kent believes the Australian banking system is faring better than its global counterparts, attributing this to stringent regulations implemented by the RBA. He went on to say that banks in Australia are “unquestionably strong” and have proven resilient despite a period of volatility and instability in global markets. 

Dr Kent claimed that although Australian financial markets were “still functioning,” volatility had “picked up” in a lecture at the KangaNews DCM Summit in Sydney.

Moreover, he added crucially, “And, most importantly, Australian banks are unquestionably strong – the banks’ capital and liquidity positions are well above the Australian Prudential Regulation Authority’s regulatory requirements.”

The Reserve Bank of Australia (RBA) also released its latest Monetary Policy Meeting Minutes, which provide further insight into the economic conditions that led to Credit Suisse’s decision to purchase a majority stake in Swiss banking giant UBS. The deal, worth three billion Swiss francs (AU$4.82 billion), comes with an agreement for UBS to assume up to US$5.4 billion (AU$8.1 billion) in losses from its biggest rival. 

Overall, while the Aussie dollar is strong against major currencies, investors remain cautious and have yet to be willing to commit to long-term confidence in its performance.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img