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November 13, 2007 07:48am
Article from: AAP
THE dollar opened more than one US cent weaker today, to start the day below US89 cents for the first time in three weeks, as carry traders deserted high interest rate currencies.
At 7am AEDT, the dollar was trading at $US0.8836/38, down sharply from yesterday's close of 0.8967/72.
This was the currency's lowest opening since October 4 when it started at $US0.8828/34 and the first daily debut below $US0.8900 since October 23 when it began the local session at $US0.8860/65.
Overnight, the dollar traded between a low of $US0.8790 and a high of 0.9020.
Macquarie Bank associate director of foreign exchange, Joanne Masters, said carry traders who usually sell low-yielding currencies like the Japanese yen for high interest rate tender were now selling out of the Australian and New Zealand dollars as a mood of risk aversion continued.
"It's basically risk reduction right across the board," she said. "We've seen that in most asset classes.
"The US dollar and yen are stronger." The latest episode of risk aversion started late last week after major US mortgage lenders updated their loss forecasts.
Ms Masters said investors were worried about the effect this would have on global economic growth.
US Federal Reserve chairman Ben Bernanke also testified to a US Congressional committee last week that losses from the subprime mortgage market could stack up to $US150 billion ($170 billion).
The dollar is tipped to trade between $US0.8790 and 0.8890 today.
"It's been a pretty significant fall through significant levels," Ms Masters said.
"I think investors are going to be fairly wary."
Article from: AAP
THE dollar opened more than one US cent weaker today, to start the day below US89 cents for the first time in three weeks, as carry traders deserted high interest rate currencies.
At 7am AEDT, the dollar was trading at $US0.8836/38, down sharply from yesterday's close of 0.8967/72.
This was the currency's lowest opening since October 4 when it started at $US0.8828/34 and the first daily debut below $US0.8900 since October 23 when it began the local session at $US0.8860/65.
Overnight, the dollar traded between a low of $US0.8790 and a high of 0.9020.
Macquarie Bank associate director of foreign exchange, Joanne Masters, said carry traders who usually sell low-yielding currencies like the Japanese yen for high interest rate tender were now selling out of the Australian and New Zealand dollars as a mood of risk aversion continued.
"It's basically risk reduction right across the board," she said. "We've seen that in most asset classes.
"The US dollar and yen are stronger." The latest episode of risk aversion started late last week after major US mortgage lenders updated their loss forecasts.
Ms Masters said investors were worried about the effect this would have on global economic growth.
US Federal Reserve chairman Ben Bernanke also testified to a US Congressional committee last week that losses from the subprime mortgage market could stack up to $US150 billion ($170 billion).
The dollar is tipped to trade between $US0.8790 and 0.8890 today.
"It's been a pretty significant fall through significant levels," Ms Masters said.
"I think investors are going to be fairly wary."
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