Positive Australian housing data overnight saw investors Buy Australian dollars

Australian Dollar Rate Outlook

The euro exchange rate remained strong against the dollar in early New York trading Monday, hovering around the psychologically important $1.50 mark, after rising global stocks suggested markets would shake off last week's disappointing U.S. jobs data and continue to load up on risk.

Finance ministers and central bankers at this weekend's meeting of the Group of 20 industrialized and developing nations didn't mention currencies in their official communique, removing what had been a possible obstacle to placing bets on higher-yielding currencies.

If U.S. stocks follow the lead of Asian and European exchanges, the euro and other higher-yielding currencies are likely to extend their gains against the best US dollar rate. U.S. stocks are expected to open higher.

In early morning trading, the euro was at $1.4991 from $1.4844 late Friday, according to EBS via CQG. The dollar was at Y89.95 from Y89.96, while the euro was at Y134.80 from Y133.53. The U.K. pound was at $1.6773 from $1.6608

The Dollar Index, a trade-weighted basket of six currencies, was at 75.109 from 75.784 late Friday. The index was flirting with nearly 15-month lows.

Positive Australian housing data overnight sent investors into the Australian dollar, which lifted other higher-yielding currencies. The Australian dollar hit a two-week high, at $0.9299, on the data that showed Australian housing-finance approvals rose 5.1% on the month in September, more than the 3% rise expected.

The continuing positive pace of Australia's economic rebound added to the view that the Reserve Bank of Australia may deliver more increases to its key interest rates in coming months, boosting investor sentiment for the Australian currency.

Australia's economic turnaround contrasts with the disappointing U.S. jobs data reported Friday, which showed unemployment rose above 10%, its highest level in nearly three decades.

The weekend's G-20 meeting in Scotland also proved uneventful for financial markets. The group didn't mention currencies at all in its final communique. Some analysts had expected exchange rates would be discussed.

More direction appeared to come from comments by U.S. Treasury Secretary Timothy Geithner and U.K. Prime Minister Gordon Brown, who warned against ending financial-crisis support programs prematurely. In other words, there won't be any rush to tighten monetary policy, which should continue to weigh on the low-yielding US dollar exchange rate.

There are no key U.S. data Monday, which means the euro exchange rate and other higher-yielding currencies should track the direction of the stock market.

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Pounds to Australian Dollars = 1.8013
Euros To Australian Dollars = 1.6633
Australian Dollars to US Dollars = 0.9298
Australian Dollars to New Zealand Dollars = 1.2457

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