The Australian Dollar has declined against the Pound and is approaching its lowest-level in three years against the ‘Greenback’ as speculation rises that the country’s Central Bank will cut borrowing costs next week.
The increasing expectations of a rate cut have continued as yesterday’s dovish comments made by Reserve Bank of Australia Governor, Glenn Stevens continued to snowball. The Comments have caused trader expectations for an interest rate cut to rise to its highest-level in 12-weeks.
“Everyone has just started jumping on the bandwagon after the weak building approvals data, but especially that dovish rhetoric we saw from governor Glenn Stevens.
‘It was really dovish rhetoric and it caused a snowball effect.
‘The market pricing shows that as we get closer to the RBA meeting, the chance of a rate cut seems to be more so and that’s weighing on the Aussie” said currency analyst Chris Tedder.
Wednesday is expected to be relatively quiet compared to Tuesday’s dramatic changes. In Asian trading there was little movement. According to Sally Auld a JP Morgan interest rate strategist the day was muted.
“It was reasonably uneventful today, especially after the extents of the rally yesterday, post the Stevens speech and the weaker data, “Ms Auld said.
“There’s a fair bit of event risk coming up, including the Federal Open Market Committee meeting in the US today.”
The currency is likely to decline again tomorrow as investors expect the latest manufacturing output data out of China, Australia’s biggest trading partner, to show a fall. They expect the report to show that output fell to 49.8 in July, down from the 50.1 level recorded in June. If confirmed it would be the first reading below 50, the dividing line between contraction and expansion, since September 2012.
Current Australian Dollar (AUD) Exchange Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9035 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6800 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5939 >
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1305 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1067 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4705 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6836 <
Correct as of 10:35 am GMT