The Australian Dollar took a tumble on Thursday, slumping to a two-month low against the Euro and Sterling as renewed fears over global growth sent investors flocking to government bonds.
The currency was dragged downward due to data showing that a recovery in the Australian housing sector stumbled in March. The number of new house-building permits fell by 5.5% in March, its biggest decline since July 2012, curbing optimism that the sector was gaining strength after years of being stuck in the doldrums.
“We have been expecting another rate cut by the Reserve Bank of Australia, but have been agnostic as to whether this could be May or June. We now think the balance of risks has shifted to the Bank moving sooner,” said Paul Brennan, chief economist at Citigroup.
The ‘Aussie’ was also weighed down by the US Federal Reserve’s decision to reaffirm its commitment to its aggressive stimulus programme. It said that it will maintain its bond buying programme at a pace of $85 billion a month and said that is prepared to raise or lower the level of purchases as economic conditions change.
“Data is not great domestically and abroad and when you have concerns about global growth, the Aussie is usually one of the first currencies being looked at,” said David Scutt, a trader at Arab Bank Australia.
The currency did see some support from another strong inflow of Chinese Yuan, which allows Chinese companies greater spending power to buy Australian goods and commodities.
Market attention is now on the European Central Bank, which is seen cutting its main Eurozone interest rate as the bloc’s economy has weakened further.
A grim outlook for the euro zone economy from the central bank could spur selling in the dollar, particularly if commodity markets falter.
Current Australian Dollar (AUD) Exchange Rates
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 1.0225
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7764
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6570
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2079
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9779
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.2879
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.5219
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8278
(Correct as if 09:50 am GMT)
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