The Australian dollar fell today on the speculation that the European leaders will struggle to find an accord regarding measures for dealing with the region’s crisis. Still, the currency is likely to end this week with impressive gains.
The joint effort of the major central banks to bring the costs of dollar swaps down set the tone for the whole week and that tone was positive. The Aussie profited from the good market sentiment and isn’t likely to give away its weekly gains unless some major negative event would happen. The rally was simply too big to easily erased on just one session that left before the end of this week.
In the longer term, though, the outlook for the currency isn’t that great. The leaders of the European countries will meet at the summit on December 9 and traders have begun to question what decision they’ll make and some were worried that the meeting yet again wouldn’t provide a meaningful plans for battling the crisis. Economists hope that the European Central Bank will become more involved in helping the European Union to get out from the present unpleasant situation, but it’s expected German Chancellor Angela Merkel would oppose the political pressure on the central bank as she firmly believes that austerity is the only way to ease the debt burden, not pleading the ECB for help.
AUD/USD fell from 1.0242 to 1.0217 and AUD/JPY was retreated from 79.57 to 79.50 today as of 3:27 GMT. EUR/AUD rose from 1.3139 to 1.3168.
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