EN:Australian dollar (AUD): Currency in heavy selloff, further demand for safer USD likely
The pound Australian dollar exchange rate is 0.863% higher on the day with 1 GBP = 1.5447 AUD.
The euro Australian dollar exchange rate is 0.927% higher with 1 EUR = 1.3379 AUD.
The US dollar Australian dollar exchange rate is 1.068% higher with 1 USD = 0.9794 AUD.
"Having been sold off heavily amid mounting concerns that we are heading into a fresh round of the global financial crisis, the AUD has bounced off the 1.0300 level during the Australian morning," says Peter Stanhope at IG Markets in Australia.
The recent bullish trend, particularly for the euro, can be partially explained by the reports that BRIC nations might step up to buy eurozone bonds, potentially halting the spiralling debt crisis.
The Australian dollar has been the primary victim during the most recent round of fear-driven selling, and if the crisis is contained, the AUD would likely be a primary beneficiary.
Westpac consumer sentiment figures also did the currency pair no harm, coming in at 8.1% versus the -3.5% expected.
Looking ahead, US dollar traders will be focussing on the US retail sales data.
With the currency rallying in recent weeks on safe-haven flows, any signs of strength in US economic data could further increase demand for the USD leading to a negative short-term impact on the AUD/USD pair.
