By TraderVox.com
Tradervox.com (Dublin) – Chinese growth data and euro-zone concerns have pushed the south pacific dollar down against the greenback, as speculation global growth is slowing rose, limiting the demand for asset related currencies. The Australian dollar declined against most of its traded peers as Chinese Economic Information Daily indicated that there is downward pressure on the second largest economy. The New Zealand dollar dropped against major counterparts on increased speculation that euro region leaders’ disagreement is hampering growth in the region.
According to James Richards, Tangent Capital Partners’ Senior Managing Director, the big question RBA is struggling with is whether to curb currency risk by cutting rate, which would weaken the currency, or do they wait and see the benefits they can reap from it. He predicted that the Reserve Bank of Australia will embrace the strong currency as the economy looks strong enough. The RBA is projected to leave the benchmark interest rate unchanged when they meet on October 2.
The RBA has lowered the interest rate by 1.25 percentage points as it seeks to shove the economy from effects of the European debt crisis and the slowing Chinese economy. The RBA signaled that it would reduce interest rates should the outlook for the economy change. However, with the recent assessment by the bank, the economy is in good footings hence the current interest rates might be extended for another month. The other south pacific currency, the Kiwi, has increased by 3.6 percent this year, making it the best performer among ten developed-economy currencies. The Aussie has declined by 0.4 percent while the US dollar dropped by 2.7 percent in the same period.
After the Chinese and Euro zone economic data, the Australian dollar dropped by 0.3 percent to trade at $1.0425 in New York yesterday where it had fallen by 0.7 percent. It dropped by 0.7 percent against the yen to exchange at 81.16 yen. The New Zealand dollar depreciated by 0.8 percent against the dollar to exchange at 82.29 US cents while it dropped by 1.1 percent against the yen to trade at 64.06.
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