The Australian currency fell against the Japanese yen over the week on concerns about Europe’s debt problems and China’s possible austerity measures. The Aussie managed to erase losses versus the euro and the US currency on the signs of the global growth and increasing commodity prices.
China, the biggest trading partner of Australia, still attempts to cool its overheating economy, but such attempt remain without success so far. The accelerating inflation spurred talks that the Chinese government will perform additional tightening, and that would be bad for Australia’s economy. Fears of the debt crisis continue to plague the European Union, reducing demand for
The global economic growth still remains strong and it allowed the Australia dollar, which fell in the first half of this week, to recover in the second half against the European and US currencies. At the same time, risk aversion sentiment was strong enough to limit Aussie’s gains versus the yen.
AUD/USD rebounded to 1.0566, near the opening price of 1.0564, after it dropped to the weekly low of 1.0389. EUR/AUD closed this week at 1.3650 after opening at 1.3692 and jumping to 1.3873. AUD/JPY fell from 89.62 to 87.84, while during the week it reached the low of 86.85.
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