Australian dollar is heading lower today, largely due to risk aversion. High beta currencies like the Aussie are at a disadvantage today as Forex traders seek safe haven with the US dollar. Concerns about global economic growth, and the situation in the eurozone, are weighing on the Australian dollar, along with other high beta currencies.
Weaker sentiment is hurting the Australian dollar, especially in Asia. As Asian stock indexes retreated today, so, too, did the Aussie. Concerns about what’s next in the eurozone are affecting Asian markets, just as these concerns affect other markets. On top of that, the Australian dollar still has slower than expected growth in China and the rest of Asia to weigh on it.
Another difficulty facing the Aussie is the expectation that cuts could be coming in Australia. Wayne Swan, Australia’s Treasurer, warned that revenues are falling, and predicted that the next budget could include spending cuts. Worries that the Down Under economy could be slowing as well aren’t helping the cause. On top of that, gold prices are barely hanging on to miniscule gains, and gold has a large influence on the Aussie’s performance in Forex trading.
At 14:27 GMT, AUD/USD is down to 1.0323 from the open at 1.0389. EUR/AUD is up to 1.2860 from the open at 1.2822. GBP/AUD is also higher at 1.5398, up from the open at 1.5285.
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