Friday, 19th July 2024

Australian dollar weakens on profit-taking

Published:  24 Sep at 6 PM
The Australian and New Zealand dollars weakened on Monday as profit-taking brought an end to rallies that were driven by world central banks launching stimulus moves earlier in September.

Meanwhile, the euro fell close to a low hit last Thursday due to ongoing uncertainty over Greece and Spain, while repatriation in Japan helped the yen move upwards, but is rise remained marginal because of wariness that the country’s central bank will intervene to stop the yen rising further – a factor which would likely hit an economy so reliant on exports.

The single currency dropped by 0.3 per cent to $1.2931, falling back towards $1.29195, a low which it hit last Thursday. The currency’s slide has been rapid, slumping by 1.8 per cent since climbing to a four-month high of $1.3173 last Monday.

Traders are now of the opinion that the common currency’s rally, which began in late July and boosted primarily on optimism that the European Central Bank would launch its bond-buying program and that the US Federal Reserve would inject fresh monetary stimulus, has come to an end.

Teppei Ino, a currency analyst at the Bank of Tokyo-Mitsubishi, said that he thinks the euro’s rally has run its course and that speculators are more likely to look towards fresh short positions and not look long-term with the euro.