Tuesday, July 17, 2007

Australian Dollar Trades Near Highest in 18 Years as Yields Lure Investors

(Bloomberg) -- The Australian dollar traded near
the strongest in 18 years against the U.S. currency and a 16-
year-high versus the yen on the attraction of the nation's
higher yields.

The local dollar is the third-best performer of the 16
most-active currencies in the past 12 months as investors have
taken advantage of Australia's yield advantage over Japan by
buying local assets with borrowed yen, as part of the so-called
carry trade. Australia's 6.25 percent interest rate compares
with 5.25 percent in the U.S. and Japan's 0.5 percent benchmark.


Read more at Bloomberg Currencies News

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