The Aussie dollar gained on Thursday even after global markets fell sharply
Investing.com – The Aussie dollar gained on Thursday even after global markets fell sharply, while the U.S. dollar, usually considered a safe-haven asset, unexpectedly slipped despite the slide in stocks.
Japan’s Nikkei 225 was down 4%, while China’s Shanghai Composite also slumped to four-year lows after U.S. stocks suffered their worst one-day drops in eight months overnight.
The U.S. dollar index, which tracks the greenback against a basket of other currencies, slipped 0.2% to 94.96 by 1:42 AM ET (05:42 GMT).
“In an environment where people are concerned about rising volatility, the dollar tends to do well – especially versus higher-risk currencies such as the Aussie and Canadian dollar,” said Stuart Ritson, head of Asian rates & foreign exchange at Aviva (LON:AV) Investors.
“There seems to be a disconnect and there is no obvious explanation for why the dollar did not fare better on a risk-off day,” said Ray Attrill, head of foreign exchange strategy at NAB.
The AUD/USD pair gained 0.4% to 0.7075. While not a directional driver, RBA assistant governor Luci Ellis said at the Melbourne Institute’s Economic and Social Outlook Conference that policy of the central bank needs to be expansionary to help the economy absorb spare capacity in the labor market.
The safe-haven Japanese yen strengthened as the USD/JPY pair slipped 0.1% to 112.17.
The USD/CNY pair traded 0.1% higher to 6.9322 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.9098 vs the previous day’s fix of 6.9072.
Forex – Aussie Dollar Gains Despite Risk Aversion in Stock Markets; Dollar Slips
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