Aussie is dropping today as risk appetite fades away, and as commodity prices fall. After seeing some strength for a while, the Australian dollar is finally dropping, to the relief of some policymakers Down Under.
With global economic growth fears once again coming into focus, the Aussie is heading lower today, especially against the US dollar. Once again, China and the United States are reporting lackluster economic numbers, and that has many concerned about the rate of global growth. It’s also not helping that the eurozone remains on the edge of recession.
For now, Aussie is dropping as gold prices lose ground against the US dollar. The Australian dollar is a commodity currency, tied to what happens with commodity prices, particularly gold. With gold plunging almost 20 points so far today, it is little surprise that the Australian dollar is headed lower as well.
The Aussie might further weaken after the next Reserve Bank of Australia meeting. Many expect that policymakers will cut interest rates, and that could further weaken the Aussie, even as it helps stimulate the economy.
At 12:50 GMT AUD/USD is down to 1.0395 from the open at 1.0432. EUR/AUD is down to 1.2408 from the open at 1.2423. GBP/AUD is up to 1.5572 from the open at 1.5548.
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