US Dollar Index, Canadian Dollar, and Australian Dollar Fell
(Continued from Prior Part)
Australian dollar fell by 1.7%
The Australian dollar-US dollar currency pair is directly related to the Australian dollar. It was on a free fall on January 15, 2016. The Australian dollar had a volatile day of trading. It reached a high of 0.7005. Later in the day, it fell to a low of 0.6824. This was near a six-year low for the currency pair. There was a slight recovery towards the end of the day. The currency pair eventually closed the day at 0.6863—a fall of 1.7% for the day.
China and crude major reasons for the fall
In 2016, there has been a downturn in commodity-related currencies led by the Australian dollar and Canadian dollar. The Australian dollar was close to 0.73 levels at the start of the year. It fell to less than 0.685. The fall in the commodity currencies is primarily attributed to the collapse in the Chinese market at the start of the year. China is a major consumer of Australian exports. The heavy fall in crude prices put more pressure on commodity currencies.
Impact on the market
Australian ETFs were trading on a negative note on January 15, 2016. The CurrencyShares Australian Dollar Trust ETF (FXA) fell by 1.8%. Meanwhile, the iShares MSCI Australia Index Fund ETF (EWA) followed a similar negative trajectory. It fell by 5.4%.
Australian ADRs (American depositary receipts) trading on US markets were also trading on a negative bias. BHP Billiton (BHP) fell by 6.9%. In the mining sector, British-Australian multinational Rio Tinto (RIO) fell by a 6.3%. Australian banking ADR Westpac Banking (WBK) was also trading on a negative bias. It fell by 4.9% on January 15, 2016.
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