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possible war to hurt Australian dollar
Published on 07.04.2017 17:44

The Australian dollar plunged in overnight trading before recovering most of the loses after an unexpected military strike against Syria from the US.

 

At 9.17am(GMT) the Aussie dollar was trading at US75.27c  after hitting a low of US75.10c

 

In what caught the market as a complete surprise, US president Donald Trump ordered a missile strike on military bases in Syria in response to a chemical attack which killed many civilians.

 

Trump immediately blamed Syrian president Bashar Al Assad for the murderous move and threatened further action if required.

 

"The markets weren't ready for the dinner to be wrapped up quickly so the missiles could be fired," noted Westpac senior currency strategist Sean Callow

"The swing in Trump's rhetoric about Syria wasn't expected either." He added.

The possible confrontation between the US and Syria may see further pressure on the Aussie dollar as most investors are predicted to move into the greenback and safe haven investments, such as gold and move out of riskier currencies such as the Aussie.

Another test for the local currency will be the release of the non-farm payrolls figure and unemployment rate from the US where analysts have predicted a solid round of figures.

If predictions turn out to be true expectations will grow for a rate hike from the US Federal Reserve this month which will only add more woes to the Australian dollar.


Andrew Masters

Analyst

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