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 â€œabsurd.â€
â€œThe us dollar rose and bond yields and equities fell,â€ Mr Speizer said in a Tuesday morning note. â€œThe 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.â€
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 â€œcould slip further 0.7910 if the risk-aversion mood persistsâ€, 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)