Australian Dollar Could Rise More vs Yen on RBA Tightening Risk
Dow Jones
Aug 11
1214 GMT - The Australian dollar could further retrace its recent decline against the Japanese yen driven by interventions to strengthen the Asian currency, MUFG Bank's Derek Halpenny says in a note. The Reserve Bank of Australia left rates unchanged Tuesday but Gov. Michele Bullock said further rate rises remain possible. The risk of RBA tightening should remain priced for some time given inflationary risks, Halpenny says. In an environment of low foreign exchange volatility, the Australian dollar could rise against the yen as investors borrow in low rate currencies to invest in higher yielding ones, known as carry trades, he says. The Australian dollar rises 0.7% to 112.11 yen, having reached a three-month low of 109.33 on Aug. 3, LSEG data show.
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