The Australian dollar sank to a one-month low versus its U.S. counterpart, falling for a fifth straight day as concerns that the euro zone debt crisis is deepening and the U.S. economy is slowing down demand for higher-yielding currencies. Despite a survey showing a rise in consumer confidence last month, housing starts rose less than expected and also a downward adjustment to second-quarter inflation average, now showing to have risen 0.6 percent in Q2, much lower than the initial 0.9 percent increase, added to the case that the Reserve Bank of Australia may need to cut interest rates. AUDUSD fell to 1.0209 from the open of 1.0345.
Euro continued to slide against the US dollar as regional bourses in Asia fell and dampened sentiment. Stocks fell as China’s central bank adviser Li Daokui said China should refrain from buying large amount of European bonds. Also Chinese Premier Wen, speaking at a World Economic Forum today said developed nations should cut deficits and create jobs rather than relying on China to bail out the world economy, though he did offer a helping hand to Europe. The MSCI Asia Pacific Index dropped 1.8 percent, set for its lowest close since August 2010. Looking ahead, a Franco-German-Greek conference call around 1600 GMT should shed more light on any new plans to tackle the Greek debt crisis. EURUSD fell to a session low of 1.3607 from the open of 1.3680.
GBPUSD opened in Asia at 1.5776 following a bounce from the previous session and initially headed up to 1.5797 but this was short-lived as Asian currencies and bourses fell, bringing cable down to 1.5738. Sterling also was weaker against euro, with EURGBP tracking EURUSD moves, opening at 0.8667and falling to 0.8640. Domestic UK data later in the day on unemployment, with expectations not looking so good, could further weigh on the pound.
The Swiss franc was little changed against the euro and the dollar, both pairs remained in an incredibly tight range as a result of the September 6 Swiss National Bank intervention in the currency markets to curb franc strength and introduced a ceiling of 1.20CHF against the euro.
USDJPY was mostly range bound in Asian trading, opening the session at 76.90 and closing at 76.88, with a brief spike in between to 77.05 due to a large purchase order by a big firm. Investors are wary of letting yen appreciate too much for fear of an intervention by the Bank of Japan. Many are waiting on the sidelines ahead of a conference call between French, German and Greek leaders, hoping for some optimistic news that will calm fears over the eurozone debt crisis.