THE movement of the Australian dollar during the past week was largely influenced by two pieces of news: the Reserve Bank of Australia’s 2 July cash rate decision and the 5 July US unemployment figures.
Recently, the Aussie dollar has been under pressure due to fears that the US might cut back on its program of quantitate easing, a decision highly dependent on the US unemployment rate.
Last Tuesday the RBA announced that interest rates would remain unchanged for the time being. However, future rates cuts remain a real possibility. The AUD weakened on the back of this news. According to Tim Waterer, a foreign exchange dealer at CMC Markets, traders were factoring in the increased likelihood of another rate cut this year based on the RBA’s statement.
Midweek, negative news from Greece and political uncertainty in Egypt fuelled risk aversion which caused EM currencies to weaken against the USD.
On Friday the US unemployment data showed higher job growth rate with 195,000 jobs created in June compared to the 166,000 predicted. This which caused the AUD to slump to 90.51 US cents on Saturday morning.
According to Westpac New Zealand senior market strategist Imre Speizer, the AUD could fall below 90 US cents for the first time since September 2010 during the coming week.
By Jaco Herselman of 1st Contact Money Transfers
Exchange rates as of 08:50 GMT, 8 July 2013
GBP/AUD: 1.643
EUR/AUD: 1.415
USD/AUD: 1.103
NZD/AUD: 0.853
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.
[ Source: Australian Times ]