As the risk appetites fall, yen rose on Wednesday while putting the Australian dollar under pressure.
This happened as investors waited for the U.S. consumer inflation data. It was said to be published later in the global session.
The AUD served to be the big mover during the Asian session. It dropped to $0.7587, falling by 0.6 percent against its U.S. counterpart, almost reaching its lowest levels since July.
It skidded to 85.81 yen against the JPY, tumbling 0.8 percent, after it fell to as far as 85.67, the lowest rate it listed since mid-August.
Data indicated that Australian wages were reported to increase by only 0.5 percent during its third quarter and 2.0 percent for the year. This fell short of 0.7 percent and 2.2 percent respectively. It also challenges the Reserve Bank of Australia’s assessment that a definite increase in wages will be made.
Another factor that added to the pressure was the sinking equities. Weaker crude oil prices was followed by the slumping of Asian stocks.
National Australia Bank’s Ray Attrill, Sydney-based global co-head of forex strategy, said, “Risk sentiment has soured somewhat in the last week or so, as the U.S. equity rally has run out of steam.”
He then added, “So you’ve had a bit of a perfect storm, with specific factors that have been supporting the yen that have also been driving down the Aussie, which is still a very risk-sensitive currency.”
Euro Rises as USD Falls
On the other hand, Euro stayed close to its 2 and a half week highs, getting support from the upbeat German economic data reported on Tuesday. This pushed it far from a 3 and a half month low of $1.1553 recorded last week.
The common currency fell marginally to $1.1797 after it surged for more than 1 percent during the previous session.
Despite the positive track for the euro, its rise caused a fall in the dollar index, which is used to measure the greenback’s strength against a basket of six other major currencies. It traded steadily on the day at 93.812, stumbling at its lowest levels since late October. This was below its high of 34.542 overnight.
A seasonally adjusted gross domestic product for Germany rose by 0.8 percent on the quarter. This surpassed the poll forecast of 0.6 percent.
The awaited U.S. consumer inflation data for October is due to come out later on Wednesday. A slight upsurge in consumer prices is projected to appear once the data is shown.
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