Riskier currencies retreat amid shifts in investors’ risk appetite

As the Fed shifts towards tightening the monetary policy, riskier currencies are on the retreat. AUD sank to a new 9-month low at around 0.7127 against USD, falling 3.14% in this week so far. NZD dropped to a 9-month low, also because RBNZ decided to hold the interest rate constant and gave the market some extra time to recover. Moreover, CAD also dipped to its 6-month low, currently trading around 0.7760 against USD. The decline in CAD is partly attributable to a plunge in oil prices as well.

In Eurozone, there is some positive news. Germany’s economy expanded by 1.5% in Q2, showing some strength in recovery. In Q1, the economy shrank by 2.1%. The finance ministry commented today that Germany’s economy is expected to accelerate its growth in Q3. EURAUD rose aggressively today, by 0.52% since the session opened. EURUSD is also on the rise, up about 0.05%, and currently trades around 1.1680.