“Australia’s dollar held its biggest gain in two months against the greenback before Federal Reserve Chairman Ben S. Bernanke speaks in Congress tomorrow.
The so-called Aussie has rebounded from its worst two-week loss in more than a year as traders bet Bernanke may counter speculation U.S. policy makers are closer to reducing bond purchases. The currency fell earlier before the Reserve Bank of Australia released minutes from this month’s meeting when it cut interest rates to a record. New Zealand’s kiwi dollar rose, building on its biggest advance in eight months.
“The way I see Bernanke playing this is that he’s just going to come out and defend his easy policies,” said Chris Weston, the chief market strategist at IG Markets in Melbourne. “People are looking to cover shorts on the Aussie dollar ahead of that, and that’s why we’re seeing the move up.” A short position is a bet that an asset will decrease in value. Weston said he expectsAustralia’s currency to strengthen toward 98.70 U.S. cents….”
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