The Australian Dollar fell to a 33-month low on Thursday after the US Federal Reserve revealed its plans to curb its monetary easing programme before the end of the year and as Australia’s biggest trade partner, China, showed further signs of an economic slowdown.
The Australian Dollar/US Dollar Exchange Rate is currently in the region of 0.9190
Fed chairman Ben Bernanke triggered a rise in the US Dollar after he told a press conference that the Fed has upgraded its forecasts for the US economy and said that it would be ‘appropriate’ to moderate the pace of the Central Bank’s bond buying later in the year, as long as the US economy continues to show signs of improvement.
The announcement immediately saw the US Dollar strengthen as investors flocked to the safe haven currency. The ‘Aussie’ meanwhile immediately came under pressure. Economists say that the outlook for the Australian currency was for it to make sharp declines.
“A move towards the end of quantitative easing in the US means more downward pressure on the Australian dollar. Expect it to fall towards US80c,” said Shane Oliver, chief economist at AMP Capital, one of the country’s biggest fund managers.
Adding to the ‘Aussie’s’ woes was the release of data showing that China’s manufacturing Purchasing Managers Index dropped to 48.3 in June from 49.2 in the prior month. Any figure below 50 indicates a contraction.
HSBC also lowered its expectations for the Chinese economy revising its expectation for growth in 2013 down to 7.4% from its previous estimation of 8.2%. The bank said that it seems that China’s new leadership seems to be focusing more on long term reform rather than short-term stimulus measures to bolster growth.
Also weighing on the ‘Aussie’ was the revelation that economists have raised their forecasts for the possibility of the country sliding into recession in the next 12 months. They claim that the fading of the Australian mining boom will drag on growth and that the still high value of the ‘Aussie’ is effecting exports.
Current Exchange Australian Dollar (AUD) Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9190 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6950 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5950 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1788
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4388 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6804 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8483 >
Correct as of 10:20 am GMT
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