With the Federal Reserve Open Market Committee due to begin its two-day policy meeting tomorrow, the ‘Aussie’ was able to approach a two-week high against its US rival.
The commodity-driven currency was boosted during local trade by mounting speculation regarding the odds of the FOMC opting to retain current intensive stimulus methods to support US growth.
The Australian Dollar exchange rate was trading in the region of 1.0356 against the US Dollar as of 09:50 am GMT
The ‘Aussie’ also gained as a report detailed an increase in Australian Private Sector Credit. The 0.2 per cent increase in March was slightly lower than the 0.3 per cent expected by economists.
As regards the FOMC meeting, one strategist stated: ‘The general consensus is that the Fed is going to remain fairly dovish. The question is not whether or not quantitative easing is going to be maintained, but if it’s going to be stepped up, and that’s played a part in the US Dollar’s recent selloff.’
In the weeks since the FOMC last met several pieces of less-than-impressive US data have been released, including Friday’s lower-than-expected GDP, denting the outlook of the world’s largest economy. The Fed has maintained that it will continue with its current approach to stimulus until the US labour market picks up significantly, and as that is clearly still a long way off the odds of the FOMC opting to either leave policy unaltered or extend stimulus are fairly strong.
Over in New Zealand, an unexpected plummet in the nation’s building approvals caused the ‘Kiwi’ to fall against the majority of its most traded peers. Economists expected building approvals to rise by 2 per cent but they actually fell by 9.1 per cent.
Following the report’s release the New Zealand Dollar slid against its US and Australian counterparts, and an economist for the Bank of New Zealand noted: ‘The approvals data was unambiguously weaker than expected. The Aussie-Kiwi cross has already come down a long way, so just in the short term, we are seeing a bit of profit taking.’
The Australian Dollar is likely to experience fairly significant movement tomorrow following the publication of Australia’s AiG Performance of Manufacturing Index and China’s volatile Manufacturing PMI.
Additional signs of weakness in China’s economy will damage the prospects of countries which rely heavily on the nation for trade, like Australia. A poor result could lead to ‘Aussie’ losses.
Current Australian Dollar (AUD) Exchange Rates
< Lower > Higher
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 1.0356 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7914 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6683 >
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2102 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9659 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.2640 <
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.4969 <
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8264 <
(Correct as if 09:50 am GMT)
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