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Thursday 21

March, 201912:34 AM



Aussie dollar bounces from 10 year low

Aussie dollar bounces from 10 year low

The Australian dollar dropped to a 10 year low against the US currency in a sharp early fall before recovering, while local stocks surged ahead.

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By AAP 04.01.2019 08:00 AM

The Australian dollar briefly dropped to its lowest levels in 10 years against the US greenback, before rebounding slightly as currency markets experienced major volatility.

The Australian dollar plunged more than three per cent against the US dollar and six per cent against the yen as part of a flash crash in the current markets.

It hit a low of 67.49 US cents, its lowest level since early 2009, before making up half of its losses five minutes later.

The American dollar, the Aussie and the British pound also crashed against the yen about the same time before similarly rebounding.

"It's been absolutely nuts," Chris Weston, head of research at Pepperstone Group in Melbourne, said

"Obviously everyone's scratching around to find an explanation."

Weston said it appeared the American dollar first collapsed against the yen, and that dragged the major currency pairs with it.

Trading was thin at the time, with United States markets closed and Japanese traders on holiday, said Weston, who blamed the flash crash in part on algorithmic trading.

"It comes at a time when the markets are very anxious anyway," he said.

At 1600 AEDT the Aussie had recovered most of its losses against the greenback, trading at 69.46 American cents.

That is still its lowest level in almost three years, since February 2016

Meanwhile, the ASX has surged ahead with across-the-board gains.

The benchmark S&P/ASX200 index closed up 75.6 points, or 1.36 per cent, to 5,633.4 at 1615 AEDT on Thursday, led by energy stocks on the back of higher oil prices.

The broader All Ordinaries was up 69 points, or 1.23 per cent to 5,694.6.

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