High commodity prices and risk appetite keep the aussie strong against the pound

The aussie continued to post decade long highs against the pound yesterday, as risk appetite in the market strengthened.

• Increasing optimism over the prospects for global growth boosted commodity-linked currencies, enabling the aussie to gain a further 1.1% against the pound, as well as achieving a 12-month high against the dollar .
  
• Indices in Hong Kong, Korea, and Taiwan all ended on Tuesday at their highest levels of 2009, reflecting buoyant investor sentiment in the region, with commodity-linked stocks leading the charge, and supporting demand for the Australian dollar.
  
• The aussie was also supported by further upbeat data released in the US yesterday, heightening investor confidence.
  
• The market is now pricing in a possible 50 base point rise in Australian interest rates, whilst by contrast the BoE has indicated that the economy may still be in need of further monetary help.
  
• In trading this morning the pound has capped its losses as investors await important UK retail sales figures for August, released today at 09:30BST.