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Australian Dollar Hits Two-Week Low on Jobs Data Speculations

July 8, 2009 at 9:59 by Jan Baros

Australian dollarThe Australian dollar, one of the main high-yielding currencies among the 16 most traded, has been witnessed a sharp decline since last week’s new wave of pessimism struck equities and commodities markets.

Since last week the Aussie entered a significant downtrend mainly against the yen and the greenback after a U.S. employment report indicated more-than-expected job cuts in the North American nation, suggesting that the global slump will still be the main world financial scenario for an undetermined period of time. The Australian dollar is down for almost a week as stock markets have been bearish for almost a week, and tomorrow, an Australian jobs report is likely to show that the unemployment reached the highest level in six years, adding to the already negative outlook for the Australian currency. The Aussie high-yielding profile lost attractiveness as investors look for safety purchasing assets mostly priced in U.S. dollar or in yen.

Economists affirm that a combination of two individual factors weigh negatively on the Aussie’s outlook, the new wave of optimism, and tomorrow’s jobs report, which is likely to come negative. The Australian dollar has climbed significantly as the global economy showed signs of recovery, but as the global slump insists to affect markets, we will be likely to see a weakening Aussie for the next weeks.

AUD/USD fell to 0.7849 as of 8:53 GMT from a previous price of 0.7955. AUD/JPY traded at 73.92 from 75.77.

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