Australian Dollar Falls as Oil Rises

The Australian dollar ended its rally against the yen today on the concern that the jump of oil prices will derail the global economic recovery.

The Australian currency, often called the Aussies, rose earlier as concerns about radiation threat in Japan eased and on the speculation that Libya’s leader Muammar al-Gaddafi will talk with the rebels to attempt a peaceful resolution of the conflict. The air strike at Libya by the coalition forces scrapped the optimism about the situation in Libya and undermined risk appetite of investors. The escalation of the conflict also spurred oil prices as the bombardment can disrupt supplies. April delivery for crude oil gained 0.3 percent to $102.62 per barrel in electronic trading on NYMEX.

The losses of the Aussie were limited by the speculation that the Reserve Bank of Australia will refrain from lowering the interest rates. The rally of commodities also can provide support for the currency.

AUD/JPY dropped from 81.62 to 81.37 today as of 3:44 GMT after it rose yesterday from 80.50 to 81.63. AUD/USD traded at 1.0053 after rising on the yesterday’s session from 0.9957 to 1.0063.

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