The Australian dollar dropped today, falling for the third straight day against its US counterpart. The reason for the decline was the inflation report that missed expectations, even though the disparity was minimal.
Australian Dollar AUD
Central Bank: Reserve Bank of Australia
Public Debt to GDP Ratio, 2015: 44.3%
Trade Balance, 2015: -$24 bln.
Inflation, 2015: 1.9%
Major commodity exporter
High-yielding interest rates
Factors of Weakness
Domestic housing bubble
The Australian dollar is the official currency of the Commonwealth of Australia. It is often called the Aussie by Forex traders. The currency was implemented in 1966 and allowed to freely float at 1983. Australia has an export-driven economy (the mining sector represents 19% of GDP), therefore the value of the Aussie depends on commodity prices. Australia has strong trading ties with Asia, particularly China, so economic growth in that region has a particularly strong impact on Australia’s currency. The Aussie is used in carry trade because of the relatively high interest rates in Australia.
Australian Dollar News Archive
The Australian dollar fell today, dropping for the second consecutive day against its most-traded rivals, as the market sentiment remained unfavorable to riskier currencies linked to commodities and growth. Positive domestic macroeconomic data did not help the Australian currency that much.
The Australian dollar dropped significantly against the US dollar after the release of the minutes of Reserve Bank of Australia, which hinted at a dovish outlook. The RBA minutes indicated that the bank was worried about Australia’s weak labor market as evidenced by high unemployment rates and the increasing risks in the housing market.
The Australian dollar today rallied higher against the US dollar to lift the AUD/USD currency pair to new heights after the release of positive employment data for March. The Australian dollar’s rally lasted throughout the European session and only abated after the opening of the American session as the US dollar rallied higher.
The Australian dollar fell after the release of economic reports from Australia and China, but the losses were rather limited despite the nervous sentiment among investors due to rising geopolitical risks.
The Australian dollar was little changed today even though domestic macroeconomic data released over the trading session was relatively decent and supportive to the currency.
The Australian dollar started the week soft, opening below the Friday’s close, as the risk-off sentiment continued to prevail on markets, driving investors away from riskier assets.
The Australian dollar slumped after today’s data showed that growth of China’s services sector slowed unexpectedly. Yet by now, the currency managed to rebound and is trading near the opening level currently.
The Australian dollar was trading broadly soft today after the nation’s central bank left its monetary policy unchanged. The market sentiment that was negative to riskier currencies also played its part in the Aussie’s decline.