Down Under Currencies Slide in FX Trading

by Trader Rich

Aussie, kiwi lower in forex trading
Both the Aussie and the kiwi are lower in forex trading on the currency market today. Like the Canadian dollar, the down under currencies are commodity currencies in FX trading. This means that global recession is taking rather a large toll on the economies connected to those currencies.

Another problem is that the down under currencies are seeing rather significant cuts to their yields. Before, the kiwi and the Aussie were seen in forex trading as high yielders. However, interest rate cuts in Australia and New Zealand have damaged the yield — giving no big advantage over lower yielding currencies.

On top of this, risk aversion has meant an almost complete cessation of the Japanese yen carry trade. And the down under currencies were major beneficiaries of the yield difference in this move. Now there is very little to temp forex traders to the kiwi and the Aussie.