The Reserve Bank of Australia’s decision to issue a 0.25 basis point rate cut left the ‘Aussie’ floundering. The currency fell notably against the majority of its competitors, slipping to a two-month low against the US Dollar, but positive news from Australia’s largest trading partner has helped the ‘Aussie’ bounce back.
The Australian Dollar exchange rate was trading in the region of 1.0190 against the US Dollar as of 10:14 am GMT
The central bank’s decision to slash the benchmark rate to a record low of 2.75 per cent on its seventh rate cut since 2011 left the Australian Dollar trading in the region of 1.0155 against its US cousin, but the currency has since strengthened to 1.0188 on the back of better-than-expected Chinese trade balance figures.
The ‘Aussie’ was also able to advance modestly on the Yen.
Despite shipments to the US and Eurozone declining, China’s export growth accelerated by 14.7 per cent last month – led by a 57.2 per cent increase in shipments to Hong Kong.
Although the data boosted the Australian Dollar, the unexpectedly strong result has led to some analysts querying the validity of the figures, and this isn’t the first time the reliability of China’s trade balance figures has been called into question.
According to a chief RBS economist: ‘Exports actually haven’t done all that well [reflecting a] pretty weak global picture [and] weak demand for Chinese exports.’
China also posted a surprisingly strong trade surplus of 18.2 billion Dollars in April, a major rebound from April’s deficit of 880 million Dollars.
However, while some industry experts are urging ‘caution in interpreting these figures’ the Chinese data still lifted the Australian Dollar.
The ‘Aussie’ was also able to strengthen against neighbouring rival the New Zealand Dollar after the latter currency turned bearish as investors learned that the RBNZ had engaged in currency intervention.
As FX expert Hiroshi Maeba states: ‘The Australian Dollar bounced a bit as the bias had been completely toward the downside and there had been some accumulation of (short) positions.’
The next piece of significant Australian news to watch out for is the nation’s employment figures, scheduled for release tomorrow at 02:30 GMT. A surprising result could inspire significant ‘Aussie’ fluctuations.
Current Australian Dollar (AUD) Exchange Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 1.0190 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7779 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6580 >
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2141 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9807 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.2856 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.5194 <
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8240 <
(Correct as of 10:14 am GMT)
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