Australian Dollar Extends Fall Amid Rate Cut Prospects
21 April 2015 - 4:46PM
RTTF2
The Australian dollar continued to be weaker against the other
major currencies in the Asian session on Tuesday, as minutes from
the Reserve Bank of Australia's April meeting showed that the bank
was considering further rate cut and it wanted to assess upcoming
data before making the decision. The RBA governor Glenn Stevens'
comments signalling further rate cut also weighed on the
currency.
Members of the Reserve Bank of Australia's monetary policy board
said that the monetary policy currently in place continues to be
appropriate, the minutes from the Reserve Bank of Australia's April
7 meeting showed.
The members added that the Australian economy continues to grow
slightly below trend, although the lower Australian dollar will
give the economy a boost.
Overnight, the RBA Governor Glenn Stevens hinted that another
rate cut is possible at its May 5th policy meeting.
Speaking at the American Australian Association in New York on
Monday, the RBA Governor Glenn Stevens said the interest rates
should be quite accommodative and the question of whether they
should be reduced further "has to be on the table."
"The board has, moreover, clearly signaled a willingness to
lower it even further, should that be helpful in securing
sustainable economic growth," Stevens said.
Monday, the Australian dollar traded lower against its major
rivals. The Australian dollar fell 0.61 percent against the U.S.
dollar, 0.50 percent against the Yen, 0.25 percent against the
Euro, 0.79 percent against the Canadian dollar and 0.31 percent
against the NZ dollar.
In the Asian trading today, the Australia dollar fell to a
2-week low of 1.0059 against the NZ dollar and a 6-day low of
1.3961 against the euro, from yesterday's closing quotes of 1.0077
and 1.3899, respectively. If the aussie extends its downtrend, it
is likely to find support around 0.99 against the kiwi and 1.45
against the euro.
Against the U.S. dollar and the yen, the aussie dropped to 5-day
lows of 0.7683 and 91.78 from yesterday's closing quotes of 0.7723
and 92.02, respectively. On the downside, 0.75 against the
greenback and 89.00 against the yen are seen as the next support
levels for the aussie.
The aussie edged down to 0.9417 against the Canadian dollar,
from yesterday's closing value of 0.9441. The aussie may test
support near the 0.93 region.
Looking ahead, the German ZEW economic sentiment index for April
is slated for release in the European session.
In the New York session, Canada wholesale sales data for
February is set to be published.
At 12:30 pm ET, European Central Bank Supervisory Board Chair
Daniele Nouy is expected to speak at the International Center for
Monetary and Banking Studies in Geneva.
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