Aussie Weakens on Reduced Demand for Riskier Assets

The Australian dollar fell today as the signs of the slower economic growth, particularly in the US and China, damped the demand for the riskier currencies.
The Federal Open Market Committee said in the statement after its meeting that “the pace of economic recovery is likely to be more modest in the near term than had been anticipated”, significantly reducing hopes for the strong economic recovery in the US and in the whole world. China’ government was trying to cool the nation’s overheated economy and its attempts seem to bring some fruit. The slower economic growth in China isn’t very particularly good for Australia, as China is Australia’s largest trading partner.
The Standard & Poor’s 500 Index fell 0.6 percent yesterday, while the MSCI World Index dropped 1.1 percent and the MSCI Asia-Pacific Index of regional shares slid 0.8 percent. The markets don’t look very favorable for the currencies linked to the growth, including the Aussie.
AUD/USD traded at 0.9082 today as of 1:51 GMT. EUR/AUD traded near 1.4432, while AUD/JPY traded at about 77.54.

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