The Australian dollar weakened today after the Reserve Bank of Australia kept the interest rates unchanged and on the outlook that the Prime Minister Julia Gillard would keep power and her Labor Party to retain government.
The RBA left the overnight cash rate target at 4.5 percent, as was predicted by the analysts. The experts say that the economic situation in Australia itself warrants the higher interest rates. The reason for the central bank to refrain from the rates hike is the concern for the global economic environment. The worries about the health of the European banks and the state of the European economy also weakened the Aussie.
The key independent lawmakers announced their support to the Gillardâs Labor Party. The probability of the Gillard’s victory over Tony Abbott arouses the concern about the taxes for the mining industry. The previous talks about the mining super tax greatly reduced the attractiveness of Australian currency for the investors.
AUD/USD fell from 0.9173 to 0.9140 as of 16:13 GMT today, following the slump to 0.9090. EUR/AUD dropped from 1.4029 to 1.3914.
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