The Australian dollar followed its Canadian counterpart in gains yesterday, erasing its previous losses. The currency was weaker at the beginning of Friday’s session and dropped near the lowest level in three weeks against the US dollar.
The International Monetary Fund said that the Reserve Bank of Australia has ability to lower interest rates if that will be necessary. The RBA has kept its key rate stable at the last policy meeting, surprising market participants. Yet talks about a rate cut persist, negatively affecting the Australian currency.
Tensions in Middle East add to worries about global economic slowdown, damping demand for currencies with higher yield. Yet the Aussie managed to shrug off the negative influence.
AUD/USD rose from 1.0329 to 1.0342 after dropping to 1.0286 — the lowest rate since October 24. AUD/JPY closed at 84.01 after falling from 83.83 to 83.43. EUR/AUD dropped from 1.2367 to 1.2310.
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