The Australian dollar extended its biggest fall among major counterparts after the Reserve Bank released its minutes from June’s meeting which indicated the currency may weaken in future.
The local currency slid by 0.30% to $0.9509 as of 6:13am GMT, at the same time it dropped 0.39% to A$ 1.4035 against the euro currency.
The Australian dollar declined against 16 major counterparts after the minutes from the Reserve Bank’s June’s meeting indicated policy makers may ease borrowing costs further.
“The inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand”, the RBA minutes noted. The minutes continued “The exchange rate had also depreciated noticeably, though it remained at a high level considering the decline in export prices that had taken place over the past year and a half.”
The Reserve Bank of Australia kept its cash rate at 2.75%, after been lowered by 25 points at the bank’s previous meeting last month. The bank predicts that the policymakers will lower the cash rate by another 25 points to an all-time low of 2.5%.
As the Chairman of the Federal Reserve said last month, the Fed may consider decrease its purchases of $85 billion in bonds every month if there are signs of improvement in the economy.
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