The Australian dollar weakened today as fundamentals were not supportive for the currency both domestically and abroad. The currency was in decline since about mid-August, though it is still far from the lows reached at the beginning of June.
Australian building approvals slumped 17.3 percent in July from a year ago on a seasonally adjusted basis. The drop was much bigger than the expected 4.8 percent and the June fall of 1 percent. Analysts think that the Aussie would remain attractive, but should become cheaper before it would be a good buying opportunity.
News from overseas was also not good. Chinaâs Shanghai Composite Index dropped to the lowest level since February 2009. The MSCI World Index was down 0.9 percent. Speculations that the US Federal Reserve would not initiate the third round of stimulus weakened risk appetite of Forex traders and made them reluctant to buy higher-yielding currencies.
AUD/USD dropped from 1.0343 to 1.0281 and AUD/JPY slid from 81.40 to 80.73 as of 23:52 GMT today. EUR/AUD rose from 1.2108 to 1.2162.
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