The Australian dollar rose against the Japanese yen today as Japan showed willingness to continue pushing its currency down. At the same time, the Aussie fell against the US dollar and the euro on concerns that the Australian central bank will cut interest rates.
Deflation in Japan intensified and that will likely lead to increasing political pressure on the Bank of Japan to weaken the yen. The likelihood of an intervention allowed the Australian currency to gain on the Japanese one.
The Aussie was soft against other majors as domestic fundamentals were not supportive for the currency. The exchange data showed that about a half of traders bet on an interest rate cut to 2.75 percent from the current 3 percent on the next policy meeting. According to Credit Suisse Group AG, the Reserve Bank of Australia will cut rates by 51 points over this year.
AUD/USD dropped from 1.0448 to 1.0407 and EUR/AUD went up from 1.2793 to 1.2930, the strongest settlement since May 18, as of 18:30 GMT today. Meanwhile, AUD/JPY advanced from 94.36 to 94.74 and its daily high of 95.07 was highest since since August 2008.
If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.