CANBERA (dpa-AFX) - Westpac analysts said that risk aversion resurfaced in markets on Wednesday as hopes of a European resolution faded, thereby boosting safe haven dollar and yen.
AUD/USD extended its overnight losses and hit a fresh 6-month low of 0.9742 and NZD/USD dropped to a fresh 5-month low of 0.7490.
EUR/USD toyed with mid-January levels but, at 1.2643/90, has held off for the moment.
USD/JPY was the most exciting currency pair today, almost wiping off yesterday's gains to finish the day at the low end of its range, 79.45-80.08. The Bank of Japan unsurprisingly held onto its current monetary stance, although the decision prompted a quick appreciation of the yen to 79.53, implying that there were still some investors out there speculating on the outcome, the firm said.
Asian equities and currencies too opened on the back foot and remained under pressure into late trade. The Indonesian rupiah lost 1.1 percent, Indian rupee fell by 0.8 percent and the South Korean won declined 0.7 percent against the dollar.
Analysts noted that there were sporadic reports of central bank action, including Korean officials saying they had 'smoothed' in recent sessions. USD/KRW gaped from 1163.50 to 1171 and then ticked up to 1172.70 late in the session as the Kospi fell 1.1 percent.
USD/SGD extended its New York session gains from 1.2740 to above 1.2780, printing fresh highs dating to 19 January. Singapore's April CPI printed above consensus at 5.4 percent year-over-year, with housing costs up 11.1 percent annually.
USD/CNY nudged up to its highest level since 15 March, its direction matching the broad market move. However, the yuan's slight fall against the dollar ensured further appreciation of the trade-weighted yuan this month, the firm said.
Chinese press stories about an official meeting to discuss growth measures did not generate any apparent confidence, with all regional shares falling, analysts said.
Copyright RTT News/dpa-AFX
© 2012 AFX News
