The Australian dollar found some footing today and hovered just above parity against the US dollar, but still remained under pressure as the prospect of imminent EU ratings downgrades weighed on appetite for riskier currencies.
With France at risk of losing its triple-A status (perhaps even being downgraded by two notches by S&P) as early as this week, Australia's sovereign debt offered investors a place of refuge. The government ten-year bond saw its yield fall to 3.86% as investors rushed in to protect their money, which supported the Aussie. Meanwhile, AUD/USD briefly touched a two-week low of $1.0032 amid reports that China will not help the EU without meeting certain conditions and guaranteeing investments. Later this evening at 7.15pm (London time) the Federal Reserve will hold its monthly FOMC meeting, where the Fed is expected to leave its interest rate at 0.25%.
Ahead of that, investors saw US retail sales data come in lower than expected at 0.2% in November, after a gain of 0.6% in October, though this had little effect on the trading pair.