Aussies Goes Down as Europe Hurts Risk Appetite

The Australian dollar weakened today as concerns about the European debt crisis curbed attractiveness of riskier assets and drove investors to seek safety.

Higher-yielding currencies suffered today as traders wait for the summit of the European Union leaders on July 21, but don’t put much hope on it. The MSCI Asia Pacific Index of shares fell 0.5 percent, dropping for the third day.

The economic situation in Australia itself isn’t great either, causing economists to speculate about decrease of interest rates by the nation’s central bank. Credit Suisse Group AG indexes showed today that investors bet Reserve Bank of Australia would decrease its key interest rate by 53 basis points over next year, while a cut by 14 basis points was expected a week ago. The minutes of the bank’s meeting will be released tomorrow and they may give hints whether such expectations are warranted.

AUD/USD dropped from 1.0626 to 1.0572 as of 16:24 GMT today after rising to 1.0653 earlier. AUD/JPY fell 84.06 to 83.62.

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