Aussie up after risk appetite improves

Sterling weakened against the Australian dollar yesterday, losing over a cent to finish the day at 2.0441.

• The Australian dollar made some gains in the early morning yesterday, after a Reuters poll suggested China is on track to achieve its 8% growth target this year, and the entire Asian continent will rebound next year.
  
• China is Australia’s biggest trading partner, although a diplomatic row has cast a shadow over trade ties recently.
  
• The Australian dollar extended its gains against sterling yesterday afternoon, as very strong corporate earnings figures from Intel and Goldman Sachs boosted demand for riskier assets.
  
• However, the Australian dollar lost some of its gains overnight, after news that CIT, a mid-sized US bank, may soon file for bankruptcy, undermined demand for riskier assets.