Global Data Negative for Aussie, Can It Find Support from Domestic Fundamentals?
The Australian dollar fell today amid growing concerns that the global economy is faltering. Prospects for the Australian currency are not bad, though, as the domestic fundamentals should support the Aussie.
Higher-yielding currencies were not in favor of traders today and the Australian dollar (often called “Aussie”) was not an exception. Europe is the main source of negativity on the Forex market, but China also added worries because of signs of economic slowdown. China is the main trading partner of Australia, making the Aussie especially vulnerable to bad news from the Asian country.
The domestic news fundamentals were completely different, giving hope that the Australian currency may yet rebound. The Producer Price Index rose 0.5 percent in the second quarter from the first quarter, more than was expected. Analysts estimated, before the government report later this week, that Australia’s consumer inflation was 0.6 percent in June, up from 0.1 percent in May.
AUD/USD fell from 1.0357 to 1.0271 and AUD/JPY dropped from 81.25 to 80.40 as of 23:52 GMT today. Meanwhile, EUR/AUD rose from 1.1698 to 1.1795.
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Earlier News About the Australian Dollar:
- Australian Dollar Benefits from Rally on Stock Markets (2012-07-18)
- Aussie Pulls Back on Chinese Comments (2012-07-16)
- Fears of Slowdown in China Drive Aussie Down (2012-07-13)
- How Long Can Aussie Gains Last with Softer Chinese Data? (2012-07-11)
- Aussie Weakens Ahead of Employment Report, Pares Losses (2012-07-10)