The Australian and New Zealand Dollars have both posted declines against the US Dollar as investors await the outcome of the Federal Reserve’s latest two day policy meeting, which is expected to give some indication as to whether the US Central Bank will begin to taper its asset purchasing programme.
Adding to the Australian Dollar’s decline were comments made by the Reserve Bank of Australia. The Bank indicated that the currency could weaken further and as policy makers revealed that they see room to ease borrowing costs further.
“The interpretation by the markets is the RBA is giving the green light for the Aussie to go lower,” said a senior economist at National Australia Bank Ltd. “Positioning in the Aussie has been excessively short, so it’s probably got some support on the downside.” A short position is a bet an asset’s price will decline.
The Australian Dollar has declined by 9.8% against its US counterpart
Over the past three months the Australian Dollar has declined by 9.8% against its US counterpart, making it the worst performing developed currency in the world. Hotly on its heels is the New Zealand Dollar, which has tumbled by 4%.
Economists are betting that the ‘Aussie’ will decline further.
The New Zealand Dollar, meanwhile, fell as investors speculate that the Federal Reserve will choose to start winding back its $85 billion a month asset purchasing programme.
The ‘Kiwi’ lost ground overnight
The ‘Kiwi’ lost ground overnight due to a stronger U.S. Dollar but really “everything is on hold waiting for Bernanke,” said Stuart Ive, OM Financials Wellington-based senior client advisor. Mr. Ive noted that data, including employment figures, out of the U.S. has been improving.
“This gives Fed Chairman Ben Bernanke scope to say ‘yes we are potentially going to withdraw some of the stimulus in the near future…but he might also emphasize that any further moves will be data dependent,” Mr. Ive said.
New Zealand traders should keep an eye on Thursday’s GDP data for New Zealand.
Current Exchange Australian Dollar (AUD) Rates
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9474
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7079
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6043
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1887
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0555
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4126
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6546
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8412
Current New Zealand Dollar (NZD) Exchange Rates
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.7969
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.5955
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5084
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8412
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2402
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9669
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6792
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1887
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.2302
(Correct as of 09:35 am GMT)
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