The Australian dollar fell today after Glenn Stevens, Governor of the Reserve Bank of Australia, talked about an economic slowdown in different parts of the world and difficulties the Australian economy may face.
Stevens mentioned the slowdown of economic growth in Asian nations, most importantly the in China. As for Europe, the Governor said:
In terms of the practical impact of these events, at present we can say that the euro area has been in recession for some months.
He wasn’t totally pessimistic, though:
The recession is expected by official forecasters in Europe, and bodies like the IMF, to be a relatively mild one, though all would acknowledge that it is impossible to be sure, as is usually the case with such episodes.
As for domestic fundamentals, Stevens mentioned difficulties that Australia may face and concluded that “recent economic performance in Australia is not too bad”, but “neither is it so good that it cannot be improved”.
AUD/USD fell from 1.0591 to 1.0582, while AUD/JPY traded at 88.23 as of 14:41 GMT today after dropped from 88.28 to 87.84 earlier.
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