I am so sad to hear this news. SAD...
The Australian
The Australian
THE Australian dollar closed more than two US cents lower after touching a fresh eight-month low, as the European debt-crisis continues to rattle investors.
At 5pm (AEST), the Australian dollar was trading at 83.15 US cents, down from yesterday's close of 85.88 cents.
Since 7am (AEST) yesterday, the local unit traded in a wide range between 84.72 US cents and 82.60 cents.
The latter was the lowest the Australian dollar has been against the US dollar since September 2, 2009, when it touched 82.41 US cents.
TD Securities FX strategist Roland Randall said the unit had been caught in the grip of investor insecurity about the on-going European debt crisis.
"The big picture is the world is selling risk assets in concerns out of Europe," he said.
"We've seen the Aussie plummet."
Global and local stock markets slid during the domestic session.
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The benchmark S&P/ASX200 index closed 1.61 per cent lower to 4316.5 points, while the broader All Ordinaries index fell 1.63 per cent to 4,342.4 points.
Japan's Nikkei 225 ended 1.54 per cent lower, while the Korean KOSPI closed 1.83 per cent in the red.
The risk averse mood in Asia matched earlier losses on European markets.
Mr Randall said there was no single issue coming out of Europe that can be blamed for sparking the risk averse sentiment.
On Tuesday, Germany's financial regulator moved to ban naked short selling of certain debt assets such as government securities.
Short selling occurs when traders bet on a stock or investment that they do not own or have borrowed.
Naked short selling - when a trader has yet to find another party - was cited as a factor in the turbulence on world markets during the 2008 financial crisis.
Investor sentiment has also been shaken by ongoing concerns about whether debt swamped nations like Greece can be saved by a recent euro 750 billion ($1.1 trillion) bailout package agreed to by EU finance ministers last week.
Mr Randall said he expected the slump in the local dollar to be temporary, with Australia's interest rate of 4.5 per cent, high compared to other Western nations, expected to support it in the coming weeks.
"We maintain our forecast that we will see a mid year Australian dollar at $US0.9200," he said.
At 5pm (AEST), the Australian dollar was at 75.93 yen, down from yesterday's close of 79.02 yen, and at 66.97 euro cents, down from 70.80 euro cents.
The euro finished at 1.2419 US dollars, up from yesterday's close of 1.2215 US dollars, and at 113.39 yen, up from 112.43 yen.
The US dollar was at 91.31 Japanese yen, down from its previous close of 92.03.
Meanwhile, the Australian bond market closed firmer as investors moved into safe-haven assets in the wake of Germany's decision ban naked-short selling.
At 4.30pm (AEST), the yield on the Commonwealth Government April 2020 bond was 5.403 per cent, down from yesterday's close of 5.434 per cent, while the May 2013 bond was at 4.790 per cent, down from 4.824 per cent.
On the Sydney Futures Exchange, the June 10-year bond futures contract was at 94.600, up from yesterday's close of 94.565, while the June three-year bond futures contract was 95.160, up from 95.120.
At 4.30pm (AEST), the 90-day bank bill rate was at 4.730 per cent, down from 4.800 on yesterday's close, while the 180-day bank bill rate was at 4.860 per cent, down from 4.910 previously.
At 4pm (AEST), the RBA's trade weighted index (TWI) closed at 66.2, down from 68.1 on Wednesday.
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