The Australian dollar declined today even though domestic fundamentals were not particularly bad. The most likely reason for the currency’s poor performance is the outlook for monetary tightening from the Federal Reserve that drives most currencies down.
The Aussie followed the kiwi in the decline even though the Australian economic data was not nearly as bad as the New Zealand one. While growth of the Producer Price Index and private sectors credit slowed in Australia, the indicators were not terrible by any measure. Still, the Australian currency declined as prospects for an interest rate hike from the Fed continues to weigh on the Forex market.
AUD/USD dropped from 0.7290 to 0.7252 as of 9:48 GMT today, trading near the lowest level since May 2009. AUD/JPY fell from 90.50 to 90.13.
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