Aussie drops due to Euro-zone concerns

Concerns of the euro-zone’s current debt crisis have caused the Aussie to sink to a 10-month low, as it extended its losses from 0.9609 to 0.9592 to the US Dollar. This is said to be the largest monthly drop in three years since the peak of the global financial markets.

The Greek Government made an announcement today stating that they will miss their deficit target set out in their bailout package. This could be a contributing factor towards the Aussies downfall.

Teppei Ino, a currency analyst at the Bank of Tokyo referred to the current possibility of a Greek default as “A Pandora’s Box that no one wants to open.”

“While some markets seem to have priced in such a possibility, it looks like the euro still has some way to go should it happen,” Mr Ino said.

Due to the Labour Day Holiday inAustraliatoday, the Aussie is likely to come under further selling pressure given the thin local markets.

Thomas Averill, director of Rochford Capital believes that the drop of the Aussie is a result of increased market fear in the European situation.

“There is a broad-based risk aversion coupled with broad-based scepticism aboutEuropeto sort out their problems in a timely manner before anyone defaults,” Mr Averill said. “Until the Europeans can do something to broadly lower the cost of funds for European nations, the market is going to be sceptical.”

GBP/AUD:      1.6096
EUR/AUD:     1.3842
AUD/USD:     0.9634
AUD/JPY:       74.00

Exchange Rates as of 10:49, 3 October 2011

Composed by Francois de Wet
::Note: The above exchange rates are based on “interbank” rates. If you want to transfer money to or fromAustraliathen please register/login on our website, www.1stcontactforex.com, or call us for a live dealing rate. Make use of a Rate Notifier to send you alert when the Australian exchange rate reaches levels you are looking for.