The Australian Dollar has weakened against the majority of its major peers as the markets continue to take in the outcome of the Italian election.
In early trading the currency had shown signs of strengthening and erased most of yesterday’s losses as advances in metal prices supported demand for the currency of the resource rich nation. The currency strengthened against the US Dollar and the Japanese Yen as shares in Australia’s biggest gold producer rose by 1.8%. The price of the precious metal increased to $1,598.55 an ounce.
After it became clear that the Italian election ended in a stalemate the market took a risk averse approach to commodity based currency’s causing the Aussie to fall against the US Dollar, Japanese Yen and even the British Pound.
The Italian elections mark an important step in the ongoing deterioration in European politics,” Westpac Bank strategists said. “Financial markets will now have to take at face value the idea that the protest vote can actually attain an overall majority in some parts of Europe’s legislature. This is indeed a worrying development and one that should rattle financial markets for some time to come.”
Also hurting the Aussie dollar were comments in a speech by top official at Australia’s central bank that policy makers are willing to take action to weaken the strong Australian Dollar as economic growth slows.
“We still obviously retain scope to lower interest rates further, should the need arise, including to counterbalance the pressures of an elevated exchange rate,” Guy Debelle, assistant governor for financial markets at the RBA, said in a speech.
The Aussie’s current weakening could be offset however, by signs that China; Australia’s biggest trading partner will continue to demand commodities from Oz.
“Data out of China is suggesting growth has stabilized and commodity demand will be still well supported,” said Janu Chan from St. George’s Bank Ltd. “That’s going to be supportive for the Australian dollar longer term.”
Current AUD Exchange Rates
The Australian Dollar to Euro exchange rate is trading at 0.7851
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trading at 1.0260
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trading at 0.6766
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is trading at 1.2341
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is trading at 1.0522
The Australian Dollar to Japanese Yen (AUD/JPY) exchange rate is trading at 94.3767
These exchange rates were correct as of 11:15 am GMT
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