At 0635 AEST on Tuesday, the Australian dollar was worth 79.37 us cents, down from 79.59 euro cents on Monday.
Westpac’s Imre Speizer said the markets had adopted a risk-averse position after inflammatory comments by North Korea.
North korea’s foreign minister said the us president, Donald Trump has declared war on a country, and reserved the right to take countermeasures, including shooting US bombers, even if they are not in its airspace. The White House has objected to the declaration, calling the suggestion “absurd.”
“The us dollar rose and bond yields and equities fell,” Mr Speizer said in a Tuesday morning note. “The US dollar index rose 0.5% … (and) the haven yen and Swiss franc) has passed, the USD/JPY down from 112.30 to 111.48. AUD slipped from 0.7970 to 0.7926.”
He said that the main risk event on Tuesday, would be the Reserve Bank of Australia (Financial Stability), Michele Bullock is scheduled to participate in a panel discussion at the Landers & Rogers and Westpac hosted a briefing by the law Where to from here? Sydney.
The Australian dollar “could slip further 0.7910 if the risk-aversion mood persists”, on Tuesday, he said. The local currency is also lower against the strengthening yen, but rose against the euro.
CURRENCY SNAPSHOT AT 0635 AEST TUESDAY
One Australian dollar buys:
* 79.37 cents from 79.59 Monday
* 88.625 Japanese yen, from 89.335 yen
* 67.00 euro cents from 66.83 cents
(*Currency closes taken at 1700 AEST previous local session)