The Australian dollar weakened as the unending troubles in Europe drove stocks and commodities to the downside, reducing appeal of currencies linked to economic growth.
The Standard & Poorâs 500 Index dropped 0.4 percent. The MSCI World Index fell as much as 1.1 percent. The Thomson Reuters/Jefferies CRB Index of raw materials declined 0.6 percent, following the drop by 2.3 percent yesterday, the biggest slump in five weeks.
Takuya Kawabata, the researcher Gaitame.com Research Institute Ltd., explained the performance of the Australian currency:
The
risk-off mood is dominant in the markets because of concerns over Greece and a slowdown in the U.S. growth, sending stocks and commodities lower. In this environment, money wouldnât find its way into commodity currencies such as the Aussie and kiwi.
AUD/USD traded at 1.0555 today as of 1:49 GMT after falling yesterday from 1.0575 to 1.0557. EUR/AUD traded near 1.3441, following the advance from 1.3400 to 1.3449. AUD/JPY traded at about 85.08 after yesterday’s drop from 85.60 to 85.13.
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