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AUSTRALIA-US-FOREX
Aussie dollar tanks to 10-year low against USD
SYDNEY, Jan 3, 2019 (BSS/AFP) – The Australian dollar briefly hit a 10-
year low against the greenback Thursday, as twitchy investors ditched more
volatile assets and traders saw evidence of a computer-aided “flash crash.”
The Australian currency sank to below 68 US cents in morning trading — the
lowest level since 2009 — before recovering slightly.
Analysts pointed to growing concern about the Chinese economy, after worse-
than-expected Chinese manufacturing data.
That concern sent mineral prices lower and with them the resource-sensitive
Australian dollar.
“Aluminium and copper were both off by more than two percent” said analysts
at NAB Markets Research, which also saw the hand of algorithms — automated
computer trades — as the reason for the severity of the fall.
At one point the Aussie dollar was off four percent against its US
counterpart.
“The fact that over half the move down… has since been retraced is
testimony to today’s moves being first and foremost a ‘liquidity event’,”
said NAB.
But the wild swing will do little to ease concerns that import and export
dependent Australia could be in for rougher times ahead.
The weaker Australian dollar makes imports more expensive.
“We are not as yet prepared to suggest that AUD/USD is now establishing a
lower (e.g. 0.65-0.70) trading range,” said NAB, while warning that a weaker
Aussie dollar could continue.
BSS/AFP/HR/0915