The Australian Dollar is trading weaker against the majority of its most traded peers as the federal government shutdown drags on into a second week and as the Australian markets was closed for a Labour Day public holiday.
The ongoing government shutdown in the world’s largest economy has caused investors to seek shelter in the safe havens of the Japanese Yen and Swiss France.
Initially traders were expecting the budget negotiation problems in the US to have a rapid conclusion. Those hopes were knocked however after Republican House Speaker John Boehner said that the House will not support bills to reopen the government or increase the nation’s debt ceiling unless the Democrats agree to negotiate on spending cuts.
The markets were spooked further early Monday after US Commerce Secretary Penny Pritzker warned that the shutdown was beginning to harm business resulting in the demand for safe havens to increase.
“The markets really want a quick bi-partisan agreement and the longer this thing keeps going the more chance there will be an economic slowdown in the US, which will impact not just Australia but the rest of the world. The last time the US government closed was in 1996 for 21 days, so the market is hoping for a quick resolution because the October 17th deadline for the lifting of the debt ceiling is basically just around the corner,” said senior Forex dealer Francisco Solar.
The ‘Aussie’ could find support later in the week if Thursday’s local job figures show signs of improvement. Economists are expecting the number of new jobs to have risen by 15,000 in September. Unemployment is expected to stay steady at 5.8%.
As long as the issues in the US continue most currencies will remain under pressure as risk aversion dominates sentiment.
Current Exchange Australian Dollar (AUD) Rates
< Lower > Higher
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9410 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6928
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1348
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4434 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.7071
Correct as of 11:20 am GMT
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