Australian dollar billsThe Australian dollar was rising in the first half of the week, reversed its decline in the second half, but wasn’t able to completely erase its losses and ended the week with closing price below the opening level.
The beginning of this week was bad for the Australian currency (often nicknamed Aussie). Concerns about the Greek bond swap were erasing demand for riskier assets. The decline of the eurozone economy and China’s downwardly revised growth target reinforced investors’ unwillingness to risk. Later market sentiment improved on positive fundamental data from the United States, particularly growing nonfarm payrolls.
Fundamentals in Australia itself were even worse. The Reserve Bank of Australia hinted that an interest rate cut is not out of question. Reports that followed made it clear that more stimulating policy is indeed warranted. The economic growth was slower than expected, while employment unexpectedly fell and trade balance surprised economists unpleasantly, posting a deficit instead of an expected surplus. All in all, everything indicates that the Aussie faced downside risks and may have a hard time in the near future.
