By TraderVox.com
According to Callum Henderson, the reaction to the rate reduction is negative for the Aussie and may drop to as low as $1.0250 by the end of the week. After the announcement, the Australian dollar dropped to $1.0294, its lowest since September 7. The currency then regained to close the day at $1.0306 which is 0.5 percent lower than yesterday’s close in Sydney. The Australian dollar dropped to its lowest against in a year against the New Zealand dollar shedding 0.9 percent to trade at NZ$1.2402.
Reserve Bank of Australia statement showed that the Australian economy is experiencing weaker growth. Glen Steven, the RBA Governor, said that the peak in resource investment is expected to occur next year, adding that it might be at a lower level than earlier projected. The Aussie is also being affected by the slow growth in China. The RBA has also published a report showing that commodity price index rose to 90.1 in September from 89.2 in August. The New Zealand dollar rose against its Aussie counterpart as an AMZ National Bank report showed that the price index in the country rose by 3.5 percent in September, the highest increase since April. The kiwi rose by 0.4 percent against the dollar to exchange at 83.11 US cents.
Asian stocks also advanced, with MSCI Asia Pacific Index rising by 0.1 percent after a 0.6 percent rise in the MSCI World Index on Monday. Jonathan Cavenagh, a Currency Strategist in Singapore at Westpac Banking Corp, said that the increase in commodity price in New Zealand has resulted to kiwi’s impressive performance adding that the higher risk appetite is driving the demand for kiwi.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox