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Australian Dollar may be safe haven currency
AUSTRALIAN DOLLAR REVIEW | There are signs that global central banks have been looking to increase exposure to the Aussie, a sign that the currency may emerge as a safe-haven asset.
THE Australian Dollar fell once again on speculation that Europe’s debt crisis will continue to raise the cost of borrowing, dampening the demand for riskier assets. The Aussie came to rest at 1.006 USD and 0.6457 GBP on Monday morning.
There are signs that global central banks have been looking to increase exposure to the Australian Dollar, a sign that the currency may emerge as a safe-haven asset. Although, with the sizable current account deficit combined with its dependence on external capital flows, the market seems to be unsure if this is a title the Aussie deserves.
On a domestic front there is little happening in the upcoming week. All eyes will be on US and European data, and The EU leaders summit being held 28-29 June, to determine currency movements.
David de Garis, NAB senior market economist was cited as saying that the poor performances on the Australian stock market and regional equities kept the Aussie low on Monday morning.
Market sentiment seems to be that things will remain subdued ahead of the European Union leaders meeting.
Mike Jones a currency strategist at the Bank of New Zealand said he believes that investors have hunkered down and will be unwilling to take a stand in the currency market until news from the Summit has been released.
GBP/AUD: 1.5486
EUR/AUD: 1.2488
AUD/USD: 1.006
AUD/JPY: 80.964
Exchange Rates at 09:19, 25 June 2012
Composed by Monique Chapman of 1st Contact
:: Note: The above exchange rates are based on “interbank” rates.
If you want to transfer money to or from Australia then please register/login on our website, www.1stcontactforex.com, or call us on 0808 141 2335 for a live dealing rate. Make use of our Rate Notifier to send you alert when the Australian Dollar exchange rate reaches levels you are looking for.
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2 Comments
Benaud, while I have to fundamentally agree with your assessment as to whether the Aussie is a genuine safe haven currency, the headline does say ‘may be’ and this would not be the first website to pose the question in light of the euro crisis. The point is whether the old truisms about the currency’s fundamentals are slowly changing as the Aussie economy marches on in an uncertain world.
Safe haven currency? How can you publish that in the headline then acknowledge in the very first sentence that it has been sold off because of the dampened demand for “risk assets”. The Aussie is the exact polar opposite of a safe haven. Its falls are directly linked to risk aversion and the opposite is so of its gains. There is no currency on the planet more fundamentally opposite to a “safe haven” than the Aussie dollar.