Australian dollar left bloody after computer-driven crash
The currency was down as much as 5% on the yen in some of the largest intraday falls in history
Sydney — The Australian dollar is picking up the pieces after a torrent of automated selling against the yen sent it plunging to multiyear lows on a host of major currencies. The currency suffered some of the largest intraday falls in its history amid a drought of liquidity and a cascade of computerised sales. At one point it was down 5% on the yen and almost 4% on the US dollar, before clawing back much of the losses as trading calmed and humans took charge. “Violent moves in the Australian dollar and yen this morning bear all the hallmarks of a ‘flash crash’ similar to that which befell the New Zealand dollar in August 2015 and pound in October 2016,” said Ray Attrill, head of FX strategy at National Australia Bank. “The fact that over half the move down in both these pairs has since been retraced is testimony to today’s moves being first and foremost a liquidity event.” One theory was that Japanese investors who had been crowded into trades borrowing yen to buy higher yielding cu...
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