The Australian dollar recovered a bit today against the US dollar and the Japanese yen after yesterday’s big drop. The decline was caused by weakness of commodities and stocks that followed the International Monetary Fund’s economic forecast of this year.
The IMF revised its global growth projections for 2013 down from 3.5 percent to 3.3 percent. The news spurred traders to sell riskier assets. The MSCI World Index dropped as much as 1.3 percent yesterday. The Thomson Reuters/Jefferies CRB Index went down 0.8 percent.
The Australian currency suffered from the sell-off as well, but looked firmer today as domestic fundamentals were not particularly bad. The Australian Westpac Leading Index rose 0.6 percent in February after advancing 0.4 percent in the prior month. The National Australia Bank business confidence index was steady at 2 in March “despite reignited worries about a European crisis and political uncertainty at home”.
AUD/USD rose from 1.0295 to 1.0309 as of 3:57 GMT today after dropping to 1.0268 — the lowest price since March 12. AUD/JPY rebounded to 101.32 after falling from 101.00 to 100.25. EUR/AUD was little changed at 1.2656.
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