The Australian dollar is trading higher today after most traders now believe that Britain will remain in the EU after the Brexit vote today.
At 6.39am (GMT) the Aussie dollar was trading at US75.32c up from US74.99c in yesterday’s trading.
Although the polls have been showing mixed results in recent weeks the momentum has swung back for the UK to remain part of the European Union which has pushed volatile currencies such as the Australian dollar higher in recent days.
The currency is now back to levels where it was before the recent rate cut by the reserve bank of Australia and some are beginning to say that the Aussie dollar around US75c is fair value.
This level seems to also be a level of comfort for the reserve bank of Australia who may sit on the sidelines for some time before raising cutting rates again if the currency remains at current levels.
They may be forced to act on interest rates again if there is a move towards the US 76c mark which is highly likely if Britain decides to stay in the EU which will be known when results are released early Friday morning.
The chances for a strong reversal in the Australian dollar is also on the cards if in fact the UK chooses to become a truly independent country like earlier polls predicted.