Improved risk appetite benefits Aussie dollar

The Australian dollar reached near 10 week highs against sterling yesterday, as higher stocks boosted demand for risk. This helped the aussie further, with it being one of the world’s higher yielding currencies. Sterling still remains under pressure due to its continuation of quantitative easing. It was also not helped by comments from BoE policy maker, David Blanchflower, who stated that Britain's economy may not recover this year and unemployment was likely to continue to rise rapidly. Investors will today focus on UK inflation data. One of the arguments against quantitative easing is that it is likely to build inflationary pressures, however this data will be too early for any possible affects to be seen.