Australian Dollar Falls This Week on Poor News for Riskier Assets

This week was volatile for the Australian dollar, but it generally declined against most other major currencies as the concern for the economic growth continues to haunt the markets.
The currencies linked to the growth had hard time to sustain their strength as signs of the slower economic growth were coming from all parts of the world. The main source of the worries is, of course, the US with its economic data, which causes the talks about the possible double-dip recession. But the traders’ concerns aren’t only about the US as Europe too reminded about its economic weakness. The forecast, that the report will show the worsening German business climate, significantly slashed the confidence in the European economy, as Germany was the main reason for the hopes in the brighter future for the EU fiscal conditions.
Even Asia, which previously demonstrated huge potential for the growth, showed signs of the economic slowdown. China was deliberately cooling its overheating economy, which isn’t very good for the Australian currency as China is the biggest trading partner of Australia. The analysts estimated that Japan’s exports expanded with slower pace. All in all, the news this week was very unfavorable for the riskier assets, including the Aussie.
AUD/USD currency pair rallied in the first half of this week, but was falling in the second, ending slightly below its opening level of 0.8931 at 0.8920 after rising to the weekly high of 0.9079. EUR/AUD fell from 1.4288 to 1.4241, following the advance to 1.4413. AUD/JPY opened at 77.00, dropped to 75.47 and closed at 76.40.

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