Markets reverse missile response

THE US dollar has rebounded as markets reversed their risk averse response to North Korea’s missile firing over Japan.

THE Australian dollar is a little higher against its US counterpart which rebounded as markets reversed their risk averse response to North Korea’s missile firing over Japan. At 0635 AEST on Wednesday, the Australian dollar was worth 79.47 US cents, up from 79.40 US cents on Tuesday.

Westpac’s Imre Speizer said: “Markets reversed yesterday’s risk averse response to North Korea’s firing of a missile over Japan. US bond yields, the (US) dollar, and equities rebounded to end the day flat.

“The US dollar index is unchanged on the day, having earlier fallen to a 30-month low in response to the missile news, but rising from the London morning onwards.

“The Australian dollar rose from 79.06 to 79.83 (US cents).” Mr Speizer said the main risk even for the local currency on Wednesday were July dwelling approvals which the market expected would fall 5.0 per cent after lifting almost 11 in June and falling 5.4 per cent in May.

He expects to see the Australian dollar “heading towards 0.8000, as long as the US dollar remains downtrodden”.

The Aussie dollar is also higher against the yen and the euro.

CURRENCY SNAPSHOT AT 0635 AEST ON WEDNESDAY

One Australian dollar buys:

* 79.47 US cents, from 79.40 on Tuesday

* 87.18 Japanese yen, from 86.33 yen

* 66.38 euro cents, from 66.06 euro cents

(*Currency closes taken at 1700 AEST previous local session)

Originally published as Markets reverse missile response