Last week, hints regarding the possibility of the Reserve Bank of Australia intervening in the currency market in order to restrain the ‘Aussie’s exchange rate turned the South Pacific asset bearish.
The Australian Dollar was trading in the region of 0.5645 against the British Pound as of 10:00 am GMT
The Australian Dollar lost ground against the majority of its most traded peers, notably hitting a three-year low against the Pound, a five-year low against the New Zealand Dollar and a one and a half month low against its US counterpart.
Overnight the ‘Aussie’ retained declines, hitting a fresh low against the ‘Kiwi’.
As currency strategist Kengo Suzuki observed; ‘The RBA’s stance of containing currency strength is very clear, so some caution is needed. [AUD/NZD could extend declines] when the prospect for a New Zealand rate hike get clearer next year.’
Further losses against the US Dollar were also recorded as a Federal Reserve official intimated that tapering would be discussed at the next central bank meeting.
Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, inferred that reducing the level of US stimulus would be discussed at the December meeting, with one industry expert commenting ‘He said he expects the Fed exit to be manageable.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate hit a high of 0.5677
However, the AUD/GBP pairing trimmed losses as UK loans for home purchase data came in below expectations.
Economists had expected mortgage approvals data to reach an almost-four year high in October, rising to 45,000. However, as the figure actually dropped from a revised 43,182 to 42,808 the Pound lost some underlying support.
Over the course of the week Australian construction work, private capital expenditure and private sector credit reports could inspire ‘Aussie’ movement.
UK house price, GDP, consumer confidence and house price data will also influence the AUD/GBP pairing as the week progresses.
As China is Australia’s main trading partner the Chinese leading index (due for release on Thursday) will also be of considerable interest.
Current Australian Dollar Exchange (AUD) Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9139 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6750 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5645 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1165 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0944 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4797 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.7714 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8980 >
Correct as of 10:00 am GMT
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