The Australian dollar dived to eight-month troughs on Wednesday and looked vulnerable to deeper losses, while the kiwi dollar fell to three-month lows, as skittish investors bailed out of higher-yielding currencies. The Australian dollar fell as far as $0.8515 after stop-loss selling kicked in near $0.8578, which was a low set in February before Wednesday's dive. Traders said speculators led the selling.
By early afternoon, the Aussie had clawed back to $0.8554, after holding above $0.8500 on talk that some buyers were defending the level to protect their investments in options. Still, it had shed nearly a hefty 2.5 US cents in the past day. The move to safety saw the kiwi down 0.8 percent to a two-week low against the yen, with the NZ dollar trade-weighted index down nearly 1 percent.
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