Aussie is finding support against other majors today, reversing earlier losses. Thanks to a little boost from gold, and Australia’s connection to the Chinese economy, Aussie is eking out modest gains.
Australian dollar headed lower earlier today, dropping as risk aversion set in. With Spanish bond yields rising, and Fitch warning that more downgrades could be coming for AAA countries in the eurozone, high beta currencies like the Aussie were falling. However, Australian dollar is now finding itself with a measure of support.
Gold prices have topped $1,600 an ounce. Aussie is tied to gold as a commodity currency, and that gain is helping make the Australian dollar a little more attractive. Additionally, Australia is a major trading partner with China. With Chinese efforts to stimulate the economy apparent, there are expectations that the Aussie economy could benefit. These developments are providing the Aussie with some gains, even though the general mood amongst Forex traders is one of risk aversion.
Things could change quickly, though. The markets remain volatile, and uncertainty is high. But, for now, the Australian dollar is supported.
At 14:55 GMT AUD/USD is higher at 0.9903, up from the open at 0.9875. EUR/AUD is lower at 1.2580, down from the open at 1.2635. The pound is higher against Aussie, though, with GBP/AUD up to 1.5686 from the open at 1.5673.
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