The Australian dollar continued its tumble today, reaching the lowest level this year against the US dollar, as adverse market sentiment and the interest rate cut earlier this month are still driving forces that push the currency down.
Europe is hurting risk sentiment and, as a result, riskier currencies, the Aussie (as the Australian currency is nicknamed) among them. The general uncertainty about the future also hurts commodities. The Australian dollar is a commodity currency and the decline of prices for raw materials hurt it. Commodities rallied in the second half of the past week and extended the rally on Monday, but slipped on Tuesday.
The decrease of the main interest rate by the Reserve Bank of Australia at the beginning of this month continues to put pressure on the Aussie. The cut was deeper than anticipated and Forex market participants are afraid that more cuts would follow. On the positive note, the Conference Board reported that Australia’s leading index rose 0.2 percent in March, while in the preceding month the index showed no change.
AUD/USD slumped from 0.9806 to 0.9767, the lowest rate since November 25, 2011, before trading near 0.9760 as of 00:22 GMT today. AUD/JPY slipped from 79.41 to 78.17. EUR/AUD advanced from 1.2933 to 1.2954.
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