Concerns over the possibility of the US Federal Reverse tapering its $85 billion per month monetary easing programme has continued to weigh heavily upon commodity and emerging market currencies including the Australian Dollar.
The ‘Aussie’ is weaker against the Pound and tumbled close to an eight-week low against the US Dollar as traders increased their bets that the Fed could choose to begin tapering as soon as December.
Economists are expecting Thursday to be a key day for the currency and the Fed as economist and soon to be successor to Fed Chairman Ben Bernanke, Janet Yellen appears before the US Senate committee to express her views on whether the Central Bank should maintain its bond-buying programme. The markets are expecting her to show support for the programme which has added $4 trillion to the Feds balance sheet.
“The recent run of data out of the States has been good, and that increases the possibility of earlier tapering, putting downward pressure on the Australian Dollar. The ‘Aussie’ is likely to trend lower over the coming months,’ Said Kieran Davies the chief economist at Barclays.
Earlier in the session the ‘Aussie’ recouped some of its losses after a report showed that consumer sentiment increased in October.
“The Aussie is being sold off on weak data but strong data is not providing that usual level of bounce, and strong stock markets aren’t supporting the Aussie at the moment. The main reason is US dollar strength and also expectations now that maybe the data out of Australia is going to be a little weaker than forecast,” Davies added.
The next piece of data due for release for the Australian Dollar is Wednesday’s Consumer Inflation report.
Current Exchange Australian Dollar (AUD) Rates
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9287
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6916
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5833
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1298
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4459
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.7141
Correct as of 09:50 am GMT
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