THE Australian Dollar opened the week with sharp declines following weaker than expected Chinese growth data and a bloodbath in commodity stocks.
While the Aussie currency traded in a range of 1.459 to 1.465 to the Pound during the previous week, on Monday it dropped through the 1.47 mark.
China’s growth rate tumbled to 7.7% in the first three months of the year, down from 7.9% in the previous quarter. This caused substantial weakness in the Aussie, China being the nation’s biggest export market.
The Aussie’s strong run has been further moderated since the release of declining commodity prices as well as disappointing US Figures. Commodity figures released on Friday showed gold has hit a 20 month low and Brent Crude Oil also hit a nine month low. In addition, US retail sales disappointed by falling 0.4% in March.
Market participants will be looking out for any news regarding the shrinking spread between US and Japanese bond yields. After Japan announced its new radical monetary policy it has caused much volatility in the Australasia area.
Looking at the week ahead, investors will be monitoring reaction to the Reserve Bank of Australia’s minutes of Tuesday’s monthly meeting and looking for further clues on their interest rate policy.
In The Wall Street Journal, James Glynn said: “Economists said the sharp drop in the Australian Dollar underscored once again the country’s hyper-sensitivity to events in China, with some arguing it raises the likelihood of a further interest rate cut this year.”
By Saskia Johnston of 1st Contact Money Transfers
Exchange rates at 10:20 GMT, 15 April 2013
GBP/AUD: 1.470
EUR/AUD: 1.254
AUD/USD: 1.041
AUD/NZD: 1.227
Note: The above exchange rates are based on “interbank” rates. If you want to transfer money to or from Australia then please register/login on our website, www.1stcontactforex.com, or call us on 0808 141 2335 for a live dealing rate. Make use of our Rate Notifier to send you alert when the Australian Dollar exchange rate reaches levels you are looking for.
[ Source: Australian Times ]
