The Australian dollar is trading higher today as investors worry about the latest developments in Greece as well as a highly anticipated speech tomorrow from RBA governor Glen Stevens.
At 5.09pm (GMT) the Aussie dollar was trading at US77.62c up from US77.27c in yesterday’s trade.
The Greek government has 4 days to agree to accept the conditions placed on it such as the economic reforms to receive the last tranche of the bailout (7.2 billion euros) in order to pay a 1.7 billion euro instalment to the international monetary fund.,
European Central Bank President Mario Draghi said it was out of everyone’s hands and the "ball lies squarely" in the hands of the Greek government.
The Reserve Bank of Australia is due to release its latest minutes meeting tomorrow which some analysts expect to be dovish which may put pressure on the Australian dollar.
Currency Analysts at Barclays are also negative on the Aussie dollar and noted 3 main factors which should see the currency lower by the end of the year.
Weak non-mining activity; the previously resilient non-mining sector has begun to show signs of weakness, removing one of the hopeful signs that supported the AUD last year.
Deteriorating risk conditions; Australia’s economy and assets have worsened the outlook for Australia’s risk-adjusted relative returns, especially in an environment of impending US rate rises.
Worsening overvaluation as a result of poor trading partner growth and continued declines in commodity prices. A 10% overvaluation in the currency is suggested due to weakening terms of trade and faces still-slowing Chinese demand for Australia’s commodity exports.
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