Australian Dollar Drops Sharply with Business Confidence

The Australian dollar fell sharply today after the business confidence indicator of National Australia Bank dropped last month. It added to talks about a potential interest rate cut from Australia’s central bank.
NAB Business Confidence, which held steady at 5 in October, dropped to 1 in November. The report noted:

Firms uncertainty over the outlook for their industries was reflected in a further erosion of business confidence. Confidence levels vary greatly across industries, although the spread narrowed considerably in the month.

The bank said that it will likely cut interest rates two times next year.
Such outlook mirrors expectations for rate cuts from the Reserve Bank of Australia. The RBA was talking about stable borrowing costs for some time. Yet with falling commodity prices and shrinking Australian gross domestic product, economists believe that lower interest rates are unavoidable.
AUD/USD dropped from 0.8291 to 0.8240 as of 5:31 GMT today, trading near the lowest level since June 2010. EUR/AUD advanced from 1.4847 to 1.4949, touching the highest rate since May 6. AUD/JPY tumbled from 100.09 to 99.00

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