This week was rather interesting for the Australian dollar as it gained versus some currencies and fell against others. Against some currencies the Aussie experienced volatile swings, yet managed to end the week not very far from where it started.
The US dollar and the euro are the examples of the currencies against which the Aussie closed near opening level after some volatile moves. The Australian dollar was falling against its US counterpart in the first half of the week, reversed the trend in the second, but the Friday’s drop erased the gains. The Australian currency was strengthening versus the euro throughout the week, yet the Friday’s decline still erased the gains. Against the Japanese yen the decline wasn’t big enough to erase the gains and AUD/JPY closed above the opening level. The Aussie was falling for the whole week versus the New Zealand dollar, while it was rising against the Canadian dollar.
The main driver for the Australian dollar, as well as for other currencies, this week was the speculation about the possible Ireland’s bailout. The initial pessimism was curbing the strength of the riskier currencies. But later in the week, after the actual discussion of the aid with the representatives of the European Union and the International Monetary Fund had begun, the mood turned to optimism, supporting the
AUD/USD closed at 0.9856 after it opened at 0.9869 and dropped to the weekly low of 0.9725. EUR/AUD closed at 1.3881, following the opening at 1.3861 and falling to 1.3717. AUD/JPY rose from 81.42 to 82.26 on the week. AUD/NZD dropped from 1.2739 to 1.2643. AUD/CAD went up from 0.9986 to 1.0032.
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