The Australian dollar pared its previous losses today as the traders used the low prices as the opportunity to buy the currency. The speculation that Australia’s central bank may raise the interest rates also helped the currency.
Earlier the Australian currency dropped as China, the biggest Australia’s trading partner, increased its interest rates yesterday, resulting in concern that China’s economic growth would slow. The news shook the markets: the Standard & Poorâs 500 Index fell 1.6 percent yesterday and the MSCI Asia Pacific index went down by 0.5 percent, the fourth day of declines. But the analysts think that without any major negative news the Aussie should resume its rally.
The policy makers of the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.5 percent. Yet the minutes of their meeting suggested that the interest rates may be increased in case of the stronger economy.
AUD/USD jumped from 0.9684 to 0.9858 as of 19:05 GMT today. EUR/AUD fell from 1.4168 to 1.4154, following the decline to 1.4103.
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