The Australian dollar managed to hold on to the 68 US cent area on Tuesday after getting hammered in offshore and early Asian trading on a renewed bout of investor risk aversion that saw it lose more than a cent.
The Aussie dipped to a fresh seven-month low of 67.95 cents as investors clamoured for the usual safe havens of gold, the Swiss franc and US Treasuries as geopolitical tensions heightened in the Middle East, and shunned peripheral currencies like the AUD.
The AUD was $0.6831/36 compared with $0.6934/39 late here on Tuesday. The Aussie also sank on the crosses with its trade weighted index at 59.5, down from 60.3 on Monday, and an eight-month low.
The Aussie has been under severe pressure in recent weeks on the risk of its huge interest rate premium over the United Sates starting to shrink as early as June as the Federal Reserve begins its tightening cycle.
Still, there was positive news for Australia's major trading partner, Japan, which reported first-quarter annualised gross domestic product growth of 5.6 percent, beating a forecast 3.6 percent increase.
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