Australia dollar drops below 91 U.S. cents Aussie touches levels not seen since September 2010 The Australian dollar fell to a nearly three-year low Wednesday on suggestions that further interest-rate cuts are in store, as the nation’s central bank seeks to aid the economy through a period of slowing. The Australian dollar AUDUSD -0.96% bought 91.08 U.S. cents compared with 91.43 U.S. cents late Tuesday in North America. The Aussie hit an intraday low of 90.92 cents, according to FactSet data, after having remained above the 91-cent mark since September 2010.The Australian dollar fell to a nearly three-year low Wednesday on suggestions that further interest-rate cuts are in store, as the nation’s central bank seeks to aid the economy through a period of slowing. In a speech Wednesday, Reserve Bank of Australia Gov. Glenn Stevens said the central bank “will be able to continue to do our part, consistent with our mandate, to assist the transition in sources of demand that is needed.” He made the comments in reference to helping strengthen and broaden economic growth, as investment in Australia’s mining sector is expected to peak soon. Stevens said the RBA deliberated for a long time before Tuesday’s decision to hold the key rate at a record-low 2.75%. “Cold comfort to those of us looking for a cut yesterday, but [Stevens’s comment] does provide confirmation (if anyone needed it) that the door is open for August, where we expect a 25-[basis-points] cut,” wrote RBC Capital Markets fixed-income and currency strategist Michael Turner on Wednesday. Interest-rate cuts from the 4.75% level started in late 2011. Stevens also said Wednesday that if the economy continues to slow, the currency will likely fall further. In a statement Tuesday, he said the Aussie “remains at a high level” despite its sharp drop since early April. marketwatch/story/australia-dollar-drops-below-91-us-cents-2013-07-03
Posted on: Wed, 03 Jul 2013 07:54:19 +0000
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