The Australian dollar suffered from troubles far far away in Greece and stumbled to a one month low against the US dollar. It found support at the 2010 peak, which sent it to bounce higher, but it remains vulnerable.
Greece has been swinging from hope to despair over the weekend and at the wake of the new week. On the bright side, a fresh property tax announced by Greece is expected to fill the gap in its bailout program – a move that will allow it to get the next tranche of aid. But this optimism was spoiled.
First, this new measure was met with anger in Greece. The people also swallowed a lot of tough medicine, and they will find it hard to swallow even more.
In addition, the German finance minister Wolfgang Schaeuble indirectly confirmed that Germany is getting ready for all the options. This likely includes a Greek default. European bank shares, some which have serious exposures to Greece, were hit hard.
These moves pushed the US dollar higher, and the Australian dollar could not stand out this time. It started lower and lost the 1.0420 line. In the second wave, it dropped all the way down to 1.0256, just above the 2010 peak of 1.0254.
From there is manage to make an impressive bounce higher, as US stocks refused to follow European ones.
For more lines and events on AUD/USD, see the Australian dollar forecast.
The Aussie was also slightly hit by a weaker than expected trade balance result: The Australian surplus dropped to 1.83 billion, slightly lower than 1.91 that was expected. Last month’s number was also revised to the downside, form 2.05 to 1.82 billion.
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