The Australian dollar was soft today ahead of tomorrow’s Reserve Bank of Australia policy meeting as retail sales trailed forecasts, adding to speculations that the central bank will cut interest rates.
Most analysts believe that the RBA will maintain borrowing costs stable, but some market participants bet that the central bank will perform a rate cut. Retail sales were unchanged in June on a seasonally adjusted basis, while forecasters have promised an increase by 0.4 percent. The Aussie was also soft because of the situation with Fonterra as some of the potentially contaminated ingredients were exported to Australia for selling after reprocessing.
AUD/USD was at about 0.8904 as of 9:28 GMT today after falling from 0.8915 to 0.8846, the lowest since August 2010. AUD/JPY slid from 88.16 to 87.58.
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