The Australian dollar slipped and plunged nearly 1% against the US dollar. Australia and New Zealand’s currencies rose yesterday to the ...
The Australian dollar slipped and plunged nearly 1% against the US dollar. Australia and New Zealand’s currencies rose yesterday to the highest rate in a year.
The Australian dollar fell to 0.86%to $0.9684 against the US dollar at 11:10 GMT, which later dropped by %1 to a$1.3517 against the European single currency.
“The RBA continues to reiterate that the bias is still toward a lower cash rate, and they do not seem to be alarmed or disturbed by the decline in the Aussie,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore. “They have always tried to indirectly maneuver a lower exchange rate, so it’s natural” that investors took profit after the recent gain in the Aussie, he added.
The Reserve Bank is looking to boost the non-mining parts of the economy, which have struggled among the elevated currencies. The local currency edged to about $1.03 in the past two years, compared with the previous rate of 73 cents.
Last week, the Organization for Economic Cooperation and Development said that a possible slowdown in China is at risk to the economy. Australia’s gross domestic product growth is predicted to face a possible slowdown of 2.6 percent in 2013.
At the Tuesday meeting, the Reserve Bank of Australia (RBA) made no changes to its borrowing policies as expected while they left the cash rate at 2.&%% .
"The inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand," RBA Governor Glenn Stevens said at the Tuesday Meeting .
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