Following a rapid growth yesterday, the Australian dollar declines against its major counterparts (except euro) today as the market participants expect the interest rates to be on hold for some time.
Worsening global economical situation spurs pessimistic expectations towards Australia’s interest rate. At 4.50 percent it’s already the highest among the developed nations and provided a good support for the currency. The Australian dollar fell against the USD, JPY and even against its New Zealand counterpart today.
The data on Australian PPI and CPI is released next week. Currency analysts believe the Reserve Bank of Australia won’t be hiking the rates until the higher than expected CPI data forces the regulator to elevate the cash rate. As the RBA said in its minutes of the July meeting:
The important question for the Board at its next meeting would be whether the new information materially changed the
AUD/USD declined from 0.8836 to 0.8772 as of 18:39 GMT today. AUD/JPY fell from 77.26 to 76.34, while AUD/NZD currency pair went down from 1.2314 to 1.2305 today.
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