Australian Money Source: Supplied
THE Australian dollar is weaker after a weekend article in the Wall Street Journal convinced traders to snap up the US greenback.
At 0700 on Monday, the Australian dollar was at 100.03 US cents, after falling below parity with the greenback on Saturday morning for the first time in 11 months.
Westpac New Zealand senior market strategist Imre Speizer said a weekend article in the Wall Street Journal, by chief economics correspondent Jon Hilsenrath, sparked a buy-up of the US dollar. The article suggested the US Federal Reserve would wind back its quantitative easing policy of buying of American government bonds.
"There was a rumour that this article would come out on Friday and that rumour caused stampede buying of US dollars against most other currencies," he said, adding that a slowdown in asset market stimulus would hurt risk-appetite currencies like the Australian dollar.
It, in turn, caused the Australian dollar to fall below parity with the greenback - to 99.61 cents - on Saturday morning for the first time since June 2012.
"You should get further reaction to this, so a move towards 99 (US cents) over the next few days would be what I'd expect."
AAP saj/cdh
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