Excerpt from: Bonds and Interest Rates CFDs and Spread Bets
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| February 16, 2007 | | Australian bond market helps currency trading | Spread bets and CFDs on Australian bonds, as well as spread betting and contracts for differences on the Australian dollar performance on the FX market should consider the current bond yields. Not only are Australian bonds affected, but the bond yields are also pushing the Aussie up in currency trading. Bloomberg reports:
The Australian dollar headed for the
biggest weekly gain this year on speculation investors were
enticed by the nation's higher-yielding bonds.
The currency is set for a third winning week, the longest
stretch since the start of November. The yield premium on
Australian two-year bonds over similar-maturity U.S. Treasuries
widened to the most in three weeks. Federal Reserve Chairman Ben
S. Bernanke Feb. 14 said inflation risks had started to diminish,
prompting traders to bet on a U.S. interest-rate cut in the
second half of the year.
``We've seen bond yield spreads rise in Australia's favor
and they are higher than the beginning of the week,'' said
Richard Grace, senior currency strategist at Commonwealth Bank of
Australia in Sydney. ``That's helped the Australian dollar.'' | | |
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