During local trading the ‘Aussie’ edged to a five-year low against the New Zealand Dollar and weakened against peers like the Pound and US Dollar as minutes from the latest Reserve Bank of Australia policy meeting were published.
The Australian Dollar was trading in the region of 0.5478 against the British Pound as of 11:05 GMT
The minutes reiterated the central bank’s commitment to maintaining a loose policy stance and stressed that the RBA remains concerned about the Australian Dollar’s ‘uncomfortably high’ exchange rate.
In the minutes the RBA asserted that policy makers were reluctant to ‘close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity’ while a weaker Australian Dollar ‘would likely be needed to achieve balanced growth.’
The RBA also added that ‘Given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady.’
While the central bank is expected to hold rates at current levels for the foreseeable future in order to limit the risk of a growth gap emerging, the slightly pessimistic minutes still resulted in ‘Aussie’ losses.
The Australian Dollar was also adversely affected by the news that the nation’s budget deficit will surge over the course of this fiscal year, hitting 47 billion Australian Dollars as the mining industry looses steam.
The Australian Dollar to Pound exchange rate hit a low of 0.5462
According to treasurer Joe Hockey; ‘The budget position has deteriorated significantly. This is an unsustainable fiscal position and the government is committed to taking the hard decision to live within its means’.
The ‘Aussie’ remained trading lower against the Pound as a UK report revealed a surprising slowing in inflation.
The market might be waiting with baited breath for tomorrow’s policy announcement from the Federal Open Market Committee but the Australian Dollar could fluctuate overnight as a result of the domestic Westpac Leading Index.
Tomorrow’s UK employment reports could also have a notable impact on the AUD/GBP pairing.
If weekly earnings increase as expected and the economy adds more than the 165,000 positions forecast the Pound could extend gains against its South Pacific rival.
Current Australian Dollar Exchange (AUD) Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.8939 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6485 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5478 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.0808 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1206 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5427 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.8239 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9257 >
Correct as of 11:05 GMT
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