Dollar Review – Aussie loses ground

The Aussie has seen heavy movement towards the end of 2011, weakening to lows of 0.63 to the British pound and 0.95 to the US Dollar, before bouncing back in the New Year. This marked depreciation of the Aussie was due to an Italian debt auction of long dated bonds. The underselling of bonds at the auction caused a dampening effect on the majority of currencies in the South Pacific.

The Eurozone debt crisis continues to weigh heavily on markets, specifically risk sensitive currencies. Fear is on the rise that the crisis may deepen causing a dampening effect on high yielding assets.

Market sentiment seems to be that this will continue for the foreseeable future but that the drastic movements that we had seen over the last few days could be attributed to the lack of market participants over the festive period. Thomas Averill, the managing director of Rochford Capital was cited as saying the European problem would continue to cause spooks in the market and some risk aversion.

Hope is on the horizon as economic factors indicate that the recovery ofUSeconomy is beginning to gain momentum. This has had a positive impact on both the Aussie and the Kiwi helping them to recover slightly from previous losses.

GBP/AUD:      1.5210
EUR/AUD:     1.278
AUD/USD:     1.0092
AUD/JPY:       78.573

Exchange Rates at 09:55, 30 December 2011

Composed by Monique Chapman
:: 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.