Australian dollar drops amid risk-averse mood

THE Australian dollar has dropped below 87 US cents as global economic growth concerns weigh on risk appetite.

Close-up of used Australian one dollar coin photographerd in Melbourne, Wednesday, June 13, 2012. Reserve Bank of Australia governor Glenn Stevens today said there are big benefits to Australian's as consumers from the high Aiustralian dollar (AUD). (AAP Image/Julian Smith) NO ARCHIVING

THE Australian dollar has dropped below 87 US cents as global economic growth concerns weigh on risk appetite. At 0700 AEDT on Monday, the local currency was trading at 86.96 US cents, down from 87.79 cents on Friday.

The Australian dollar started on a downward spiral last week after economic growth forecasts for Germany, Europe’s largest economy, were lowered.

That sparked a tone of risk aversion, with global share markets tumbling on Friday.

“Sentiment rather than new news drove the moves,” National Australia Bank global co-head of FX strategy Ray Attrill said. Mr Attrill said the US dollar rose against all currencies but the Australian dollar was the “biggest loser” of the G10 currencies.

“In currencies, the US dollar rose against everything bar the Japanese yen, the latter still proving its mettle as the pre-eminent safe-haven currency,” he said.

Monday is set to be a quiet day, with little economic data due to be released.

Currency snapshot at 0700 AEDT on Monday

One Australian dollar buys:

* 86.96 US cents, from 87.79 cents on Friday

* 93.50 Japanese yen, from 94.59 yen

* 68.83 euro cents, from 69.08 euro cents

* 111.20 New Zealand cents, from 111.60 NZ cents

* 54.09 British pence, from 54.44 pence

One euro buys:

* 126.34 US cents, from 127.08 cents

* 135.84 Japanese yen, from 136.93 yen

One US dollar buys:

* 107.52 Japanese yen, from 107.76 yen

(*Closes taken at 1700 AEDT previous local session)

Source: IRESS

Originally published as Australian dollar drops amid risk-averse mood