The Australian dollar slumped today, following yesterday’s gains, as the Reserve Bank of Australia voiced concern about the impact of slowing growth in China and other emerging economies on the global economy.
The RBA released its Financial Stability Review today. The central bank said in the release:
Attention has instead shifted to China and other emerging market economies. The growth outlook for a number of these economies has deteriorated against a backdrop of higher debt; in addition, lower commodity prices, fiscal pressure and political instability are compounding the situation in some cases.
The comments added to speculations that under current circumstances the RBA will be forced to cut interest rates.
AUD/USD dropped from 0.7328 to 0.7271 and AUD/JPY slid from 87.11 to 86.58 as of 13:21 GMT today.
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