A major uplift in the value of the Australian dollar (AUD) has been recorded in forex markets today (6 October 2015).
Lifted on the back of a positive statement from the Reserve Bank of Australia (RBA) regarding potential threats to growth, AUD gained almost 0.5% against the US dollar to reach a day-high of 0.7133.
The RBA stated that ongoing strength in the US economy will serve to aid Australian market activity in the coming months and argued that recent weak employment data should be nothing to fear for investors.
Speculation that the RBA could cut interest rates further this year now appears to be unfounded given these latest comments, as any reduction in the Australian base rate would be predicated upon a need to safeguard growth.
Portfolio investment expert Richard Benson told Reuters: "They don't sound like they want to cut.
"There's already a lot of bearishness on China in the price of some Asia trades and the stability provided by the Chinese central bank has calmed a lot of these trades down."
Indeed, AUD has fared fairly poorly in recent months as a result of the lacklustre market activity witnessed in China in particular. However, with growing confidence of a market recovery, the upturn in forex trading for the Aussie dollar is expected to be maintained.
Mr Benson concluded that many investors have placed short positions on AUD right now - a sensible stance given the currency's recent weakness - but with many now choosing to close such bets, this too could have a positive impact on pricing and see the currency "squeezed higher".