Remember a couple of weeks ago when the Australian dollar dipped under parity with the greenback and then fell well under 98 USc?
The Australian dollar hit a high of $US1.0294c, the highest it has been since the float in 1983.
It eased to close at $US1.0226 USc. It was also buying around 72.8 euro cents, 64 pence and 83.5 yen.
The Aussie jumped by around 3% last week.
Monday morning it opened up at $US1.0237.
We saw a plethora of gloomsters emerge warning that the dollar could fall even further, how this was a sign of things to come and how the currency would face uncertain times thanks to the rising tide of dangers from the Middle East and North Africa, the housing bubble and then the impact of Japan’s triple tragedies.
Even at the weekend there were more reports telling us that Japan’s woes would hurt us and how things were changing in financial markets.
And yet as we were reading these reports on Saturday morning, the Australian dollar had closed after hitting its highest level since it began floating in 1983.
The rise in the value of the Aussie was seen as part of the shift to riskier investments that has helped power markets to the best week for months last week.
The AMP’s chief economist and strategist Dr Shane Oliver said on Friday ,"The $A is expect it to remain strong as Australian interest rates remain relatively high and as commodity prices remain high, particularly once rebuilding commences in Japan.
"By year end we see it rising to around $US1.10," he wrote in his weekly note.
In fact the Aussie dollar had its biggest gains against the US currency since last July.
That was despite a rise in the value of the US dollar after better than expected growth figures were released for the 4th quarter of 2010.
The euro fell against the dollar as European Union leaders couldn’t finalise completely the bailout fund changes and startup capital for a program for future emergency aid, because of problems in Portugal, Finland and Germany.
Normally a jump in the value of the Aussie dollar is usually seen against weakness in the greenback, but not towards the end of last week.
The Canadian dollar weakened against most other major currencies on the back of the problems in Europe which saw the greenback rise.
But the Loonie (as the Canadian dollar is called) closed lower after Prime Minister Stephen Harper’s Conservative Party government fell from power when the opposition voted to support a non-confidence motion in his minority government, triggering an election to be on May 2.
The Aussie currency topped the previous record of 102.56 USc recorded early in early January.
Dealers said the currency was helped by the combined selling of the yen 10 days ago by major central banks which was aimed at ensuring a rising yen does not handicap Japan’s ability to rebound from the natural disaster of a fortnight ago.
The move bolstered the Australian dollar, in particular, which had sunk below 75 yen at one point this month, and has since rebounded about 10%, according to analysts.
