Australian Dollar Hits 3-Week Low on American Financial Concerns
Speculations that U.S. banks losses may increase moved the Australian dollar to a level very close to the lowest in 3 weeks.
After the Bank of America Corp. increased its future loan loss provisions 57% to $13.4 billion, the Aussie and the New Zealand dollar, being both high-yielding currencies, immediately feel, as negative numbers coming from the U.S. increase the concerns about the global crisis current status. Despite the news, Glenn Stevens, the Reserve Bank of Australia Governor, is contradictorily optimistic about the situation and affirmed yesterday during a speech that Australia will recover from the crisis as soon as China improve its economy and trade.
Analysts around the world arent as optimist as Mr. Stevens, continuing to allege that the situation for the Australian dollar is highly dependent on a confidence recover movement in worldwide markets. The excessive level that main currencies in Oceania reached during the past weeks was perceived by traders, who sold many Australian and New Zealand assets in order to make profit, as uncertainty in the U.S. economy suggests that, for now, avoiding high-yielding currencies would be a good bet.
The AUD/USD fell dramatically from 0.7170 to 0.6990. The NZD/USD went in the same direction, falling from 0.5660 to 0.5540.
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Earlier News About the Australian Dollar:
- U.S. Economy Reports Push Down the Australian and NZ Dollar (2009-04-15)
- Aussie and Kiwi Gain as Risks Decrease (2009-04-13)
- Aussie Rises to New Monthly Maximums (2009-03-17)
- Aussie Rises as RBA Leaves Rate Unchanged (2009-03-03)
- AUD Gains for 2nd Day as Confidence Grows (2009-02-19)