Australian And New Zealand Dollars Fall Against Most Majors On Weak Equities
Wednesday, the Australian and the New Zealand dollars plunged against most major currencies as stocks declined amid concerns about the pace of recovery in the world’s largest economy.
As expected, the Federal Open Market Committee, the monetary policy-setting arm of the Federal Reserve, said yesterday that it decided to leave interest rates unchanged and reiterated that rates are likely to remain exceptionally low for an extended period.
However, the Fed downgraded its economic assessment and said it will reinvest the proceeds from mortgage securities in government debt, in a shift from seeking an exit from its emergency measures to fight the financial crisis.
Stocks plunged mostly in Asia and Europe today as measures announced by the Fed failed to ease concerns about the pace of recovery in the world’s largest economy.
Japan’s Nikkei 225 index fell 2.7%, Hong Kong’s Hang Seng slipped 0.8%, New Zealand’s NZX 50 index lost 0.3%, South Korea’s Kospi declined 1.3%, Taiwan’s main index plunged 1%, Australia’s S&P 200 index fell 1.9% and the All Ordinaries index was 1.8% lower.
Germany’s DAX, France’s CAC 40 index and U.K.’s FTSE 100 index are currently down by more than 1% each.
Consumer confidence in Australia rose sharply in August, as reported today by Westpac Bank and the Melbourne Institute. The group’s consumer confidence index for August increased 5.4 percent from July to reading of 119.2 points.
The Australian dollar weakened against the currencies of US and Japan in early deals on Wednesday. At present, the aussie is trading at a 12-day low of 0.9030 against the greenback and near a 3-week low of 76.93 against the yen, compared to yesterday’s close of 0.9132 and 78.02, respectively. If the aussie weakens further, it may likely target 0.891 against the greenback and 74.7 against the yen.
The U.S. trade balance for June and the monthly budget statement for July are slated for release in the New York session today.
In early trading on Wednesday, the Australian dollar edged down against the Canadian dollar. The aussie-loonie pair is currently trading at a 5-day low of 0.9360 with 0.925 seen as the next downside target level. At yesterday’s close, the pair was quoted at 0.9412.
The Australian dollar slipped against the New Zealand dollar during Asian session on Wednesday. The aussie-kiwi pair is presently trading at a 2-day low of 1.2565 and the next downside target level is seen at 1.253. The pair closed yesterday’s trading at 1.2623.
During early deals on Wednesday, the New Zealand dollar dropped against the Japanese yen. The kiwi-yen pair is now trading at more than a 3-week low of 61.20. If the kiwi falls further, it may likely target the 61.0 level. The pair was worth 61.88 at yesterday’s close.
