The Australian Dollar declined against peers like the British Pound (AUD/GBP) and US Dollar (AUD/USD) during the South Pacific session as remarks from the International Monetary Fund (IMF) took a toll.
Earlier in the week the Australian Dollar broke out of its recent downtrend and recorded modest gains against a number of its currency counterparts thanks to the publication of ever-so-slightly better-than-forecast Chinese manufacturing PMI.
The South Pacific asset was also supported by an uptick in commodity prices and disappointing US Durable Goods Orders data.
IMF Warns that RBA May Need to Cut Interest Rates Again in 2015, Australian Dollar Declines: AUD/EUR, AUD/USD, AUD/GBP Lower
However, the Australian Dollar shed previous gains and softened across the board after the International Monetary Fund (IMF) stuck its oar in on the subject of interest rates and the Reserve Bank of Australia (RBA).
The Australian Dollar to US Dollar (AUD/USD) exchange rate fell to a low of 0.7682
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate fell to a low of 0.4885
The Australian Dollar to Euro (AUD/EUR) exchange rate fell to a low of 0.6869
The RBA has already adjusted borrowing costs this year but many industry experts have voiced the opinion that further action is needed in order to support domestic growth – and it seems the IMF is in agreement on this.
The institution insinuated that Australia’s ‘outperformance’ is coming to an end, and that ‘without reform, growth is likely to converge to a slower rate’.
But currency strategist Elias Haddad disagrees with the IMF and stated; ‘There are signs that further RBA rate cuts may not be required, supporting the Australian Dollar. Australia’s unemployment rate has trended lower over the past six months, employment growth has picked up and household consumption has been stronger than expected over the past few quarters.’
While this week has been a little devoid of major economic releases, the AUD/GBP and AUD/USD exchange rates could experience modest movement overnight in response to the Australian Job Vacancies data for May.
During the European session the Confederation of British Industry’s Reported Sales number for June could be the biggest cause of AUD/GBP currency movement, although the report is of fairly low volatility.
AUD/USD fluctuations, on the other hand, may be more notable as the US is set to publish US Initial Jobless/Continuing Claims figures, Personal Income/Spending reports and the Markit Composite/Services PMIs. Upbeat US data could send the AUD/USD pairing to fresh lows.
Disclaimer: Currency-Converter.com.au and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. Currency-converter.com.au make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. Currency-converter.com.au shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.