While the commodity-driven Australian Dollar was supported yesterday as investors considered the Syria solution and resignation of potential Federal Reserve Chairman Lawrence Summers, gains were shed during the Australasian session.
The Australian Dollar exchange rate was trading in the region of 0.5854 against the British Pound as of 09:55 am GMT
The South Pacific asset lost ground against peers like the Pound and US Dollar as minutes from the most recent Reserve Bank of Australia policy meeting reiterated the central bank’s belief that a softer currency could boost the progress of Australia’s economic recovery. However, losses against a broadly weakening US Dollar were limited.
In the minutes the RBA asserted; ‘Members agreed that the bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them. Some further decline in the exchange rate would be helpful’.
The ambiguous comments offered a stark contrast to the more decided tone of the Reserve Bank of New Zealand’s policy meeting minutes, published last week.
Since the RBNZ stated that ‘rate increases will likely be required next year’ the ‘Kiwi’ has broadly strengthened, and the dovish RBA minutes saw the ‘Aussie’ slip further against its neighbouring currency rival.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate hit a low of 0.5826
After the minutes were published economist Lee Sue Ann was quoted as saying; ‘A soft exchange rate is what the RBA wants. Given the recent recovery in the Aussie Dollar, I think the RBA is very careful not to close the door for rate cuts ahead.’
Similarly, another industry expert observed; ‘We can’t rule out the possibility that the RBA will have an easing bias again, given weakness in Australia’s economy is getting visible.’
While market volatility is likely to be dictated by US news over the next few days, additional ‘Aussie’ fluctuations could be inspired by Australia’s conference board leading index and Westpac leading index for July, due out tomorrow.
As the European session got underway the ‘Aussie’ consolidated declines against the Pound as UK inflation was shown to have slowed to 2.7 per cent last month, as expected by economists.
Today’s US inflation data could be responsible for AUD/USD movement.
Current Exchange Australian Dollar (AUD) Rates
< Lower > Higher
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9314 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6978 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5854 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1386 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0728 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4318 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.7082 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8774 >
Correct as of 09:55 am GMT
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