The Australian Dollar (AUD) recovered from initial losses caused by the downing of a passenger airliner over eastern Ukraine as Chinese data offered support.
On Thursday the currency fell sharply after news broke that a Malaysian passenger jet crashed in the redoubled region of eastern Ukraine. All 298 passengers on board were killed.
Tensions increased after the Ukrainian government accused pro-Russian rebels supplied with weapons from Moscow of shooting down the plane.
If that turns out to be true then relations between the West and Russia will deteriorate further.
One US Minister said that ‘there will be hell to pay’ if it turns out that Moscow was involved.
The ‘Aussie’ fell as investors turned to the safe haven currencies of the Japanese Yen and Swiss Franc but reversed that decline following the publication of data from China which showed that business sentiment in the world’s second largest economy increased sharply for a fourth consecutive month.
‘This piece of data confirms our recent bias for a rise in China’s GDP expectations. The data we’ve had out of China this week does suggest we’ve passed the weak spot. The outlook for China in the second half of this year looks considerably better than it did in the first half,’ said a research analyst from Nomura.
If the situation in Ukraine deteriorates further than we can expect the Australian Dollar to soften as investors are likely to turn to safer havens once more. Also denting risk demand is Israel’s ground assault in Gaza.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.9379 ,
Australian Dollar,,Pound Sterling,0.5476 ,
Australian Dollar,,Euro,0.6936 ,
Australian Dollar,,New Zealand Dollar,1.0789 ,
US Dollar,, Australian Dollar ,1.0659 ,
Pound Sterling,, Australian Dollar ,1.8219 ,
Euro,, Australian Dollar ,1.4411 ,
New Zealand Dollar,, Australian Dollar ,0.9260 ,
[/table]
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