Australian dollar has been struggling a bit recently, but today there has been some gains, following a bit of weakness. But, even with the Aussie higher right now, is there a chance that the Down Under currency could head lower again?
Aussie headed lower earlier, thanks in large part to the issues out of China. With a cash crunch in China threatening the world’s second-largest economy (and one of Australia’s major trading partners), there were worries about the Down Under currency.
However, the Australian dollar has overcome some of its earlier losses and is now heading higher against most of the major currencies. Even with the concerns about the global economy, as well as losses by commodities (Aussie is a commodity currency), the Australian dollar still looks attractive.
The benchmark rate from the Reserve Bank of Australia is still higher than the rates offered by many other countries. Indeed, it still makes sense for traders to borrow at the low, low rates offered elsewhere, and then use dollars or euros or pounds to buy Aussie-denominated assets for the higher potential returns.
Things could change, though, if the RBA cuts rates and if the Australian economy continues to flag.
At 13:28 GMT AUD/USD is up to 0.9230 from the open at 0.9211. EUR/AUD is down to 1.4174 from the open at 1.4216. GBP/AUD is down to 1.6698 from the open at 1.6700.
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