The Australian dollar experienced wild swings over the last 24-hours amid drastically changing market sentiment.
The Aussie was initially sold off throughout the Asian session yesterday as equities lost ground and risk-aversion set in.
Despite the early sell-off the Aussie turned around sharply during the European and US sessions amid speculation European policy makers will take further steps to ensure the region’s debt situation does not worsen.
This saw demand for risk assets return, which drove the national currency higher against the greenback (AUDUSD).
The local unit has remained strong during today’s Asian trading session with Asian shares extending the global equity market rally, supporting demand for higher-yielding assets.
It has been a similar story for the New Zealand dollar over the last 24-hours.
The Kiwi was sold against the US dollar (NZDUSD) throughout the Asian session yesterday but pared losses during the European and US sessions.
The Great British pound gained a full cent against the greenback (GBPUSD) following reassurances from eurozone officials that they will do whatever necessary to ease funding strains.
The euro bounced back from an eight-month low against the US dollar (EURUSD) and a 10-year trough versus the yen (EURJPY), helped by better-than-expected German sentiment and speculation of more support from the ECB.
Finally, the Japanese yen fell against most of its major counterparts as a mood of confidence returned to markets, diminishing demand for safe-havens.