Australian Dollar weakens on inflation data release
AUSTRALIAN DOLLAR REVIEW | Lower than expected inflation dampens currency but it remains within recent ranges.
WHILE the overall AUD and USD rates continued declining last week as precious metals prices weakened and Australia reported lower than expected economic data, the Australian Dollar has remained within recent ranges against to its US counterpart.
The AUD/USD pair hit last week’s high of 1.0577 on Tuesday as the US reported a lower than expected Existing Home Sales number.
Whilst so much of the Aussie’s direction has been dictated by offshore happenings, inflationary data remained key for the higher yielding asset with a stronger than expected reading likely to provide some solid support above the 1.0550 level.
However, Thursday saw the Aussie fall after data showed Australia’s fourth-quarter consumer prices were lower than forecast, increasing prospects for an interest-rate cut by the Reserve Bank of Australia at a meeting on 5 February
While the Australian currency initially fell against most of its major counterparts, it remained within forecast range and there was still plenty of support on the downside just above 1.0530.
“The Aussie hasn’t been the same since a report this week showed domestic consumer inflation fell short of expectations,” Joe Manimbo of Western Union Business Solutions said, reported Bloomberg.
The Australian Dollar closed out the week with investors selling out of long AUD positions, finding a weekly low of 1.0402 US Dollars.
This week, eyes will be on the latest PPI data due on Friday.
By Ruth Laatz-Reineke
Exchange rates at at 07:56 GMT, 28 January 2013
Note: The above exchange rates are based on “interbank” rates. If you want to transfer money to or from Australia then please register/login on our website, www.1stcontactforex.com, or call us on 0808 141 2335 for a live dealing rate. Make use of our Rate Notifier to send you alert when the Australian Dollar exchange rate reaches levels you are looking for.