The Australian dollar gained today against the other currencies on the Forex market after the countrys central bank cut the interest rate to the lowest level in decades and the government announced a stimulus package for the economy.
The Reserve Bank of Australia decreased the policy interest rate from 4.25 percent to 3.25 percent today — the lowest level since 1964. In addition, the government announced that A$42 billion will be spent on the infrastructure projects and the grants this year to counter the effect of crisis. The Aussie stopped its 3-day losing streak against the greenback after these news.
Analysts expect that the Australian dollar may climb significantly against the U.S. dollar on these news. The added liquidity will surely help the currency to cope with the declining demand for exports and the lower money market trust level. But they also warn that the success will not probably last too long and the general trend on AUD/USD pair will remain bearish.
AUD/USD rose from 0.6300 to 0.6366 as of 10:03 GMT today after reaching as high as 0.6419 earlier. AUD/JPY went up from 56.29 to 56.94 with the daily high at 57.69. AUD/NZD advanced from 1.2553 to 1.2633 today.
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