Rates in Australia to Remain Unchanged in Near Term, AUD Falls

The Australian dollar slumped today after the remarks of Australia’s central bank governor suggested that there will be the interest rates increased in the new future.

Glenn Stevens, the Governor of the Reserve Bank of Australia, said that the stronger currency was helping to contain the inflation and suggested that the current level of the interest rates is appropriate in the near term. The statement caused the speculation that there will be no interest rates hikes, which were priced in the currency.

The Australian currency also weakened at the risk aversion sentiment strengthened. North Korea’s state-run news agency said that the planned naval exercises of South Korea and the US pushed the peninsula “closer to the brink of war”. The concerns about the sovereign-debt in Europe continues to sap the strength out of the commodity currencies.

AUD/USD closed at 0.9642 after it opened at 0.9807 and reached the intraday low of 0.9611. EUR/AUD closed at 1.3736 after opening at 1.3619.

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