Australian dollar approaches 12-year highs

The Australian dollar gained sharply against sterling yesterday, nearing new 12 year highs. The BoE decision on Thursday did little to move markets, as it kept rates on hold at 0.5 percent and announced it would continue on with its planned quantitative easing. However, the aussie spring boarded in light trade on Monday, as improved equity markets in the US helped demand for riskier assets. The main positive for the aussie was proposals by China to stimulate domestic demand. Australia depends heavily on commodity based exports, so improved demand from China bodes well for commodity prices and the domestic economy.