By TraderVox.com
Tradervox.com (Dublin) – The Australian dollar dropped to its lowest level against the greenback as Australian Retail Sales grew less than the market was expecting. It weakened against most of its peers as speculation Bank of Australia will make another rate cut rose. The New Zealand dollar weakened against the dollar as signs of global economic slowdown continued to rattle the market. The increased safety haven demand precipitated the declines in commodity related currencies such as south pacific currencies and the Canadian dollar. Fears of global economic slowdown have been supported by the weak data from China with non-manufacturing industries growing by least since March 2011.
According to Eric Theoret, a Toronto-based Currency Strategist at Bank of Nova Scotia, data from china signals the challenges of expectation of slowing global economic growth. Global commodities dropped on Chinese report, with Standard and Poor’s GSCI index of raw materials dropping by 2.3 percent. The Australian dollar was pushed further down by data from the Australia showing that the nation’s trade gap widened by more than three times the market expectation. The report also showed that the imports exceeded exports by $2.07 billion in August. Vassili Serebriakov, a Currency Strategist in New York at Wells Fargo & Co projected that the RBA may make another rate cut in November following the dismal performance on Australian economy.
The Australian and US dollar have dropped by 1.9 percent this year while the New Zealand currency increased by 4 percent among the ten most traded currencies. The Australian dollar dropped yesterday by 0.5 percent against the dollar to exchange at $1.0216 in New York, where it had touched its lowest since September 6 of $1.0196. It was little changed against the yen at 80.19 yen. The New Zealand currency depreciated by one percent to exchange at 81.94 US cents after touching its lowest since Sept 12 of 81.74 cents.
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