The Australian dollar dropped together with other commodity currencies today, most likely due to the sharp decline of crude oil prices, after showing decent performance during the previous trading session.
The Aussie weathered yesterday’s announcement of China’s credit rating downgrade rather well, ending the session with gains against major peers. Yet today, the currency dropped after prices for crude sank about 1% while the Organization of Petroleum Exporting Countries was discussing an extension of oil production cuts. While Australia does not export oil, its currency still often reacts to changes of prices for crude as they tend to affect all currencies linked to raw materials in a similar manner.
AUD/USD dropped from 0.7501 to 0.7466 as of 11:44 GMT today. AUD/CHF declined from 0.7299 to 0.7258.
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