AUD/USD managed to climb to 1.0233 as the USD weakened as traders moved into more risk assets. The Australian dollar recovered a bit of ground yesterday morning, helped by profit-taking and a bounce in Chinese stocks, though the mood remained fragile on global growth worries and subdued economic data in Australia. The Aussie gained half a cent. Traders cited active participation from the model funds who are big buyers on dips. Risk aversion eased after the European Central Bank said it was ready to buy bonds of troubled euro zone countries and the Ministers Eurofin activated the ESM and also drew up plans to deal with Greece and Spain.
The IMF reduced global growth and the World Bank reduced its outlook for the Asian regions.
The Aussie has fallen around 1.4 percent so far this month versus its U.S. counterpart and 2.5 percent against the euro, due in part to a rate cut by the Reserve Bank of Australia (RBA) last week and the prospect of more easing. A top Australian central banker said on Tuesday weaker global outlook and a softening in the domestic labor market were the "primary factors" behind last week's easing.
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