March 17,2011 – Different tragedies have happened on various parts of the world. A lot of people were affected because of these drastic events and happenings. The most recent tragic scenario we had witnessed was the earthquake and tsunami which hit Japan. It was devastating. It victimized a lot of people. Many people went missing, others ended up dead.
Up to this moment, people in Japan are still trying to recover. They are picking up the pieces. The bits and pieces left by such disaster. Their economy was startled due to this unexpected occurrence.
In other parts of the world, some countries were also affected due to what happened in Japan. The tsunami made a domino effect. It not only affected Japan but also the whole world as well.
One of the countries affected by this is Australia. It has been reported by Japanese Prime Minister Naoto Kan that due to the tsunami, a fire started in a reactor in the Fukushimi atomic power plant when it was hit by the earthquake. It is further expected to have a nuclear leak at which radiation levels are dangerously high. Residents were told and advised to stay inside their homes to avoid radiation sickness.
RBC Capital Markets fixed income and currency strategist Michael Turner acknowledged the news that affected the currency traders. They are to take a risk; thus, causing the currency value to go down.
With this news at hand, the Australian dollar went down by more than one US cent; it dropped below parity. It has been an ugly day for the traders.
Another important point discussed is that the Reserve Bank of Australia (RBA) said that it would have to consider the effects of recent natural disasters in deciding what to do with interest rates.
As expected, Japan will still have an effect on Australian currency and economy since countries in the world are all connected with each other. Every country has something to give and something to take from other countries. Thus, whatever happens to one country, it will always have an effect on other countries may it be too small or too large an effect. Everyone will just have to be ready whatever it takes because we won’t know when nature strikes again. RBC Capital Markets fixed income and currency strategist Michael Turner said the news hurt currency traders’ appetite for risk and caused the local unit to soften.
