The Australian dollar was up a bit after getting whacked yesterday,
Yesterday we posted "Marc Faber June 16: "Short the Australian Dollar" (AUD/USD)", here's some more insight from FT Alphaville:
Having warned about increasingly negative sentiment towards the euro, Bank of New York Mellon’s Simon Derrick takes a stab at commodity currencies on Wednesday.
In a nutshell, they are behaving oddly. More specifically, he says, they’re behaving very much like they did ahead of the 2008 mega sell-off.
You see, according to Derrick, it was all very simple at first.
Eurozone jitters from December onwards led to a logical erosion of the store of value in the euro. This saw the euro lose 25 per cent of its value against gold and 21 per cent against oil.
Consequently, commodity-backed currencies like the Canadian loonie and Australian dollar flourished against the euro too. The former was up 17 per cent against the singly currency and the latter up 11.5 per cent. The next in line to benefit were the ‘safety’ currencies of the US dollar and the Japanese yen — both of which saw performances not far short of the CAD, according to Derrick.
The Swiss franc and British pound, however, remained relatively steady or even underperformed the euro. The underperformance of the first though, was largely linked to the Swiss National Bank’s (SNB) strategic policy of keeping the Swiss franc weak.
The thing is, ever since the SNB stopped its intervention path all these patterns of behaviour have changed somewhat, notes Derrick.
As he explains:
Since June 17th (the day that the SNB effectively stepped back from the currency markets), three currencies have stood out as the top performers amongst the majors: the CHF, JPY and GBP (with the EUR losing 3.7% against the first two currencies and 2.9% against the third). In contrast the EUR has fallen just 1.3% against the USD and has actually gained in value against both the CAD and AUD. In line with this it is noticeable that both gold and oil have also fallen in value against the European unit.But, Derrick says it would be wrong to link the change to the SNB....MORE