Tuesday, July 12, 2011

Westpac: Aussie Declined due to the Risk Aversion

Australian dollars hit today 2-week minimums versus US dollar and Japanese yen on the concerns about the global economic recovery and on the expectations that the European debt crisis will spread more, while the region’s authorities are unable to act decisively to prevent it.

Analysts at Westpac and RBC note that risk aversion has significantly strengthened. In their view, the pair AUD/USD is poised for more declines.

According to the survey of more than 400 companies that took place from June 24 to June 30 conducted by National Australia Bank, confidence index dropped from 6 in May to 0 in June. Specialists at NAB that weaker confidence and slower consumer spending will increase the pressure on the Reserve bank of Australia to keep the rates unchanged at 4.75%.

The pair AUD/USD dropped from $1.0600 to the lowest level since June 29 at $1.0524. The pair AUD/JPY fell from 85.53 to the minimum since June 28 at 84.78.

daily audusd 18-24

Chart. Daily AUD/USD

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