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.
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.
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