THE Australian Dollar strengthened against the majority of its peers over the last week. This despite the weak manufacturing data reported from China, ending the week at 0.644 British Pounds and 1.047 US Dollars. However, the Aussie weakened again over the weekend, opening this week at 0.641 Pounds and 1.045 US Dollars.
Despite US Federal Reserve moves to implement QE3 stimulation over the coming months and markets suggesting Europe is progressing towards a resolution of its debt crisis, forecasts are for a slump in commodity prices due to an overall global slowdown.
In the weeks ahead we will look towards the Reserve Bank of Australia meeting on 2 October to clarify the market’s currently mixed messages. The Dow Jones Newswires reported that the majority of 15 economists surveyed expect the RBA to maintain its current cash interest rate of 3.5%. On Monday though, the National Australia Bank announced it had changed its call of ‘no change’ to an expectation of two interest rate cuts in the short-term. This matched the ANZ’s change of tack late last week, sighting the downward trajectory of commodity prices as the major consideration for the RBA in the face of the currency’s stubborn strength.
Exchange Rates at 09.54, 24 September 2012
Composed by Monique Chapman of 1st Contact
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