Australian dollar strengthens to 12-year high against the pound

The Australian dollar gained back ground against sterling yesterday, climbing to a 12-year high as a more optimistic tone in markets triggered greater demand for riskier assets. This was largely driven by the US central bank indicating the economic outlook was slightly better, coupled with signs of improved performances from banks. This was supported by strong results from Spanish banking giant Santander, which also owns a number of UK based banks including Abbey. The aussie also gained further support from improving metal prices, as fears have for now subsided over the impact of Swine flu. However, this may still come back into the equation if the pandemic starts to worsen dramatically.