THE world’s fourth most traded currency, the Australian dollar, has hit the skids. Reaching a 20 month low against the greenback on Monday, with similar falls seen recently against all the major currencies, all of a sudden it is being referred to as the “whipping boy” by many traders. And the currency’s darkest days could still lie ahead.
Last week opened with mixed opinions towards the RBA’s announcement on whether or not to keep interest rates steady at 2.75%, with the majority predicting that the rate will remain the same. Economists were correct and rates remained unchanged, with the currency withering all the more as the week progressed.
Strong US employment figures and weak Chinese trade data, all contributed to the Aussie dropping further to 93.93 US cents in this week’s early trading. That’s a 12% fall in two months. The Australian dollar also hit a 20-month low in its currency trade-weighted index to 72.2.
The only sector in Australia to show some glimmer of hope was mining, which actually showed an increase of 1.5% over the last quarter.
Looking ahead, all eyes are on the RBA which indicated that the Australian dollar remains to too strong. While holding rates steady, reports suggest a further rate cut could be looming and markets may begin pricing this in ahead of an announcement.
By Anton van Teylingen of 1st Contact Money Transfers
Exchange rates at 07:30 GMT, 10 June 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.