After Australian Treasurer Wayne Swan announced the nation’s budget the ‘Aussie’ sank to an 11-month low against its US rival.
The Australian Dollar exchange rate was trading in the region of 0.9873 against the US Dollar as of 10:00 GMT
During the announcement Swan intimated that the recent strength of the ‘Aussie’ is hampering economic growth, and that in order to push Australia forward focus needs to be directed at spending on education, disability care and infrastructure.
However, industry experts have since reached the conclusion that the budget will do little to reverse Australia’s economic slowdown, increasing the likelihood of the Reserve Bank of Australia issuing another rate cut.
As currency strategist Michael Woolfolk comments: ‘The Aussie Dollar has been undermined by expectations for more rate cuts. The budget outlook calls for a further easing stance from the [RBA].’
The Australian Dollar was also adversely affected by data showing that the nation’s wage index rose by less than economists had predicted, climbing by 0.7 per cent in the first quarter of 2013 rather than 0.8 per cent.
Declines against the US Dollar were exacerbated as investors bet that the Federal Reserve may soon taper off its easing programme, lowering the appeal of higher-risk assets.
According to Joseph Capurso of the Commonwealth Bank of Australia, ‘For the remainder of the week, the Aussie Dollar will be quite heavy. The US Dollar will remain quite firm, I think US bond yields will continue to lift a bit further. ‘
This week yields on US securities were able to achieve a two-month high on the strength of speculation that the Fed will bring an end to quantitative easing.
The ‘Aussie’ has now posted eight days of declines against the US Dollar, its most significant run of dips for over eighteen months.
Current Australian Dollar (AUD) Exchange Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9873 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7650 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6483 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2046 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0130 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3078 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.5435 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8295 >
(Correct as of 10:00 GMT)
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