The Australian dollar dropped during the current trading session, reaching the lowest level in more than two months against the Japanese yen. Both domestic and overseas fundamentals contributed to the drop of the currency.
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 Reserve Bank of Australia maintained its cash rate unchanged during the monetary policy meeting on Tuesday. The Australian dollar reacted positively to the news. Currently, the Aussie trades off the day’s highs but still above the opening level.
The Australian dollar gained today even though news from China, Australia’s biggest trading partner, was not supportive. Perhaps, the currency gained support from positive domestic fundamentals.
The Australian dollar rallied against other currencies during the current trading session with the help of good macroeconomic reports from Australia and its biggest trading partner, China. The exception was the US dollar, against which the Aussie rallied initially but retreated to trade close to the opening level later.
The AUD/USD currency pair was trading within a range for the better part of today’s session even as markets await the release of GDP data for the last quarter of 2016 early tomorrow morning. The Aussie failed to capitalize on a weaker US dollar even as markets await Donald Trump‘s speech before congress scheduled for later today.
Monday’s economic data from Australia was very good with a huge jump of corporate profits, but that did not prevent the Australian dollar from falling against its major rivals.
The Australian dollar dipped intraday, but the losses were short-lived, and the currency has climbed above the opening level by now. Other commodity currencies, like the Canadian and New Zealand dollar, demonstrated the similar performance during the Thursday’s trading session.
Macroeconomic data released from Australia today was mixed, but that did not prevent the Australian dollar from rising and even reaching multi-year highs against such currencies like the euro and the Swiss franc.
The Australian dollar fell against its US counterpart but logged moderate gains against other most-traded rivals after the Reserve Bank of Australia released relatively upbeat minutes of the February policy meeting.
The AUD/USD currency declined significantly today to reverse the bullish trend that the currency pair has enjoyed since the beginning of the year. This was a major reversal from the currency pair’s rally witnessed yesterday after the release of positive Australian employment data for the month of January.