Aussie’s Advance Cut Short by Gold Slump
Posted by Edward Dy on May 28th, 2008
|
Photo Credit: Claire L. Evans
The Australian dollar’s advance versus the US dollar was cut short after the decline in gold price. Gold being Australia’s third most valuable export has greatly affected the value of the country’s currency.
The Australian dollar declined as gold futures lost as much as 1.9 percent, the largest ever percentage decline since April 29. About 17 percent of the Australian economy comes from raw materials exports.
The decline in Australian dollar has eradicated this week’s gains that rendered the outlook for economic growth bleak.
The Australian dollar rallied at 96.13 U.S. cents from the previous day’s 96.16 cents and also from 96.54 cents, which is a 25-year high, on May 22. Analysts however believe that the Australian dollar will plummet to about 90 cents within six months. Meanwhile, the Aussie traded 100.02 yen from 99.78 yen.
“I have a problem with the Australian dollar up at these levels and I just don’t see the logic in buying it. The commodity complex is not unambiguously positive for the currency,” said treasury strategist Peter Pontikis, Suncorp-Metway Ltd., Brisbane, Australia.
“It’s possible that people are looking for a reason to sell Aussie. But, from what I see of those headlines, it actually looks pretty balanced. There’s been a significant move, and that’s just a statement of fact,” said senior currency strategist Sean Callow, Westpac Banking Corp., Sydney.
TradingSolutions:Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.
Commercial Forex Trading Secrets Revealed
Play to Win $50,000 - Fantasy Stock Trading Game
Forex Trading Courses