The Australian dollar dropped today on the mounting concerns about the slowdown of the global economic recovery, caused by the debt crisis in European and the unfavorable economic data from the US.
The International Monetary Fund said that its aid program for Portugal “entails important risks”. The IMF also said that “important challenges remain to overcome sovereign debt problems in the euro area”. These words reduced optimism for the Eurozone economic stability, even though the IMF revised the growth projections for Europe up to 2.5 percent for this year and next.
The Australian economy also gives causes for concern. ANZ Job Advertisements fell by 6.5 percent in May from April, following the drop by 0.4 percent in April, signaling that the employment growth slowed. On the other hand, ANZ Chief Economist Warren Hogan predicted:
Recent stronger investment spending data in Q1 combined with very robust investment intentions suggest to us that the labour market will strengthen later in the year as capital investment picks up. We expect the unemployment rate to gradually trend down over the year ahead.
AUD/USD fell to 1.0656 from 1.0719 today as of 3:14 GMT. EUR/AUD advanced to 1.3749 from 1.3699, while AUD/JPY dropped to 85.15 from 85.84.
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