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$A level despite Syria tensions

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Published on: Wednesday, August 28, 2013

The Australian dollar has managed to hold its ground despite investors getting out of riskier assets ahead of a possible US attack on Syria.

The US government is planning an air strike or missile attack on the country as punishment for the Syrian government launching a chemical weapons attack on its own civilians.

At 1200 AEST on Wednesday, the local unit was trading at 89.57 US cents, up from 89.56 cents on Tuesday.

Since 0700 AEST on Wednesday, the Australian dollar traded between 89.26 US cents and 89.89 cents.

Easy Forex senior currency dealer Francisco Solar said the Australian dollar is being supported because traders are looking to buy the currency when it falls towards 89.20 US cents.

"It's moving to and fro, we've had a 60 point range so far this morning in Asia, which is quite large compared to yesterday.

"But the Aussie is pushing lower, it wants to push lower on the back of risk aversion because of what is happening in the Middle East.

"That is making the market wary."

Mr Solar expects tensions over Syria to be the main driver for currency markets for the remainder of the week.

"The louder of the battle drums get the louder the risk aversion," he said.

Meanwhile, Australian bond futures prices were higher at noon.

At 1200 AEST on Wednesday, the September 10-year bond futures contract was trading at 96.105 (implying a yield of 3.895 per cent), up from 96.065 (3.935 per cent) on Tuesday.

The September three-year bond futures contract was at 97.240 (2.760 per cent), up from 97.220 (2.780 per cent).


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