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AUD/USD update (16th Nov 2011, 15:30)

The Australian dollar fell close to parity this afternoon as investors continued to fret about Europe’s intensifying debt crisis.

After Italy’s borrowing costs once again soared over 7%; Spain, France, Belgium and Austria all came under pressure with their government bond yields also jumping higher, sparking speculation that these countries will be next to follow in the footsteps of Greece and Italy. With the eurozone debt crisis far from under control, fears increased that the demand in commodities will fall, pushing the commodity-based currency to an intraday low of $1.0061 and into the perceived safe-haven of the US dollar.

Apart from European developments, US consumer price index data also prompted the US dollar to extend its gains against the Aussie. Data showed that inflation fell for the first time in four months in October, to 3.5% from 3.9% the previous month. Regardless of the data, the intensifying eurozone debt crisis is likely to remain in the spotlight this week, dominating movements for this pair, as investors are likely to move into the safety of the US dollar to protect their wealth.


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AUD/USD update (16th Nov 2011, 15:30)

The Australian dollar fell close to parity this afternoon as investors continued to fret about Europe’s intensifying debt crisis.

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