AUD/USD has extended its decline Friday, pressured by risk aversion and contagion from Europe’s debt problems. The pair started the Asian session around $0.9890 after sliding late in the U.S. session when the Dow Jones Industrial Average closed near the day’s lows. After trading up to around $0.9898 in early Asian trade, prices were then subject to some heavy selling pressure. U.S. banks entered the market moving the rate from $0.9880 to $0.9862 with the sales driven by a lower than expected Chinese Q2 growth forecast from the State Information Centre. Traders also attributed some Japanese banks selling into AUD/JPY on the way down. Some real money support for the Aussie was observed ahead of $0.9855 but risk aversion pressure overwhelmed the market. The $0.9850 options barrier was taken out and some stops flushed the rate down to session lows of $0.9826. The pair has also been pressured by ANZ Bank chief Mike Smith’s comments saying that due to the ongoing eurozone uncertainty had closed offshore funding for Australian banks. AUD/USD is currently trading fresh session lows at $0.9815.
EasyForexNews Research Team