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Aussie and Kiwi Continue Bearish Trend

August 12, 2008 at 9:48 by Andriy Moraru

Australian dollarBoth Australian and New Zealand currencies continued to fall against the U.S. dollar today as the traders’ confidence that the central banks of those countries will cut interest rates soon rose and the dollar continued its growth against euro, pound and yen.

The Australian dollar (also known by its nickname Aussie) has already lost more than 11.3 percent since it reached its 25-year maximum against the U.S. dollar on July 15. The Reserve Bank of Australia left interest rates unchanged on its last meeting on August 5, saying that the current decrease in economic output will allow lower lending rates.

Apart from the high interest rate, Aussie was supported by the rising oil and commodity prices. With the current decline in the crude oil prices this support is disappearing, allowing the faster drop for the Australian currency.

The New Zealand dollar that is also know as kiwi declined to the lowest rate since September 11 today as the further reports on housing slump ensured traders that the Reserve Bank of New Zealand will have to continue lowering the interest rates this year.

AUD/USD fell for the eleventh day today — from 0.8814 to 0.8770 as of 7:37 GMT with the daily minimum at 0.8730. NZD/USD declined for the sixth day today — from 0.6972 to 0.6963 with a daily low at 0.6933. AUD/NZD also dropped today reflecting the weakness of Aussie compared to kiwi in the current situation; the currency pair went down from 1.2630 to 1.2588.

If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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