Australian Dollar Rises To 1-week High Against Euro

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The Aussie thus climbed to a 1-week high against the euro and it recovered from a 6-day low against the greenback and the loonie.

According to survey results released today by the Australian Industry Group and Commonwealth Bank of Australia, the Performance of Services Index for April rose 3.4 points from the March to a reading of 52.3. The figures are seasonally adjusted. AIG said services sector activity expanded thanks to generally improved business conditions.

Adding to aussie's uptrend, a report from the Australian Bureau of Statistics showed that the number of new dwellings approved for construction in Australia increased in March 2010 by a seasonally adjusted 15.3 percent from February. In non-seasonally adjusted terms, the monthly increase was 1.5 percent.

However, the Australian stock market is trading sharply lower today with stocks across various sectors tumbling down on heavy selling on the back of a weak close on Wall Street overnight and renewed worries about global economy following the debt crisis in Eurozone.

The benchmark S&P/ASX 200 index, which plunged to 4,641.4, is currently trading at 4,650, down 87.1 points or 1.8% from its previous close. The broader All Ordinaries index is down 94.3 points or 2% at 4,659.

The Australian dollar strengthened against the euro in early Asian deals on Wednesday and hit a 1-week high of 1.4229 at 9:35 pm ET. If the aussie climbs further, it may likely target a new record high near the 1.40 level. The euro-aussie pair that closed yesterday's trading at 1.4295 is presently worth 1.4245.

During early Asian deals on Wednesday, the Australian dollar rose against the yen and reached a high of 86.51 at 7:50 pm ET. Although the aussie eased thereafter, it rebounded shortly and the pair is currently worth 86.33, compared to 85.97 hit late New York Tuesday. The next upside target level for the Australian dollar is seen at 88.0.

The Aussie recovered from a 6-day low against the currencies of US and Canada in early Asian deals on Wednesday. At present, the aussie is worth 0.9115 against the greenback and 0.9326 against the loonie, up from 0.9075 and 0.9302, respectively. If the aussie gains further, it may target 0.935 against the loonie and 0.922 against the greenback.

The Euro-zone retail sales for March and the services PMI reports from the major European economies for April are expected in the upcoming European session.