Aussie dollar pares losses

The Australian dollar recovered most of its previous day’s losses against sterling yesterday, after comments from Fed Chairman, Ben Bernanke, that banks were likely to remain healthy without being nationalised caused a surge on Wall Street. This helped stem extreme risk aversion, although associated comments from Bernanke kept investor sentiment fragile. In the UK economic data was mixed, with CBI figures showing retail sales had fallen at a much slower pace than expected, while other data revealed investment had fallen at its fastest pace since the early 1990's and mortgage approvals were down over 40 percent on a year ago. Investors are today likely to focus on preliminary growth data for the UK. Markets are expecting the figures to reveal that the British economy has shrunk at a faster pace than had initially been forecast.

GBPAUD: 1 week chart. Click on graph to enlarge.