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Australian Dollar Falls Against the Canadian Dollar After COFER Data

Posted by WorldWideMarkets . on Jul 1, 2013 3:36:00 AM

Australian dollarThe Australian dollar fell against the Canadian dollar after the first listing of the two currencies as separate line items in the International Monetary Fund's quarterly foreign exchange report on Friday. Central banks held US$98.66 billion in the Australian, 1.63 percent of allocated reserves, and US$94.93 billion in Canadian dollars, 1.57 percent of allocated reserves. Prior to the report analysts had been thinking the Australian dollar would strengthen if it had a greater allocation. Analyst conjecture in hindsight is that some of the fall in the Australian dollar was from month-end adjustment ahead of an RBA meeting next week. But other analysts point to expectations that the share of reserves in each currency was about 2 percent. When both came in light, they both sold off. That doesn’t completely explain why the aussie took the biggest hit but add in the release of China’s PMI’s, which ahead ogf time was expected to fall, and there is at least a plausible explanation given the aussie’s favor as a China play. All easy after the fact.

 

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