Late Monday morning the U.S. dollar is considerably higher after a new risk aversion, with the commodity currencies including the Australian and Canadian dollars and in particular are selling off dramatically as commodity prices fall.
The Australian dollar is trading 79.17 U.S. cents from 80.57 on Friday. The U.S. dollar is trading around C$1.1540 against its Canadian currency from C$1.1339 on Friday.
Traders are waiting for Federal Reserve's open market to announce tomorrow a new Federal Funds Rate. This fact brings uncertain mood among investors, which in turn is weighing on stocks and other riskier asset classes including commodities.
A report of Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said the combination of the World Bank's forecast for a deeper recession this year than it anticipated as recently as March, together with some reports that China's commodity stockpiling is set to slow, has strengthened on industrial metal prices and has encouraged gaining profit in the so-called commodity currencies , such as the South African rand and Brazilian real.