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Weekly roundup: Australian dollar undermined by RBA’s ‘dovish’ hike

currency-newsWeekly roundup: Australian dollar undermined by RBA’s ‘dovish’ hike
The Australian dollar tumbled at the start of last week, with the AUD/USD exchange rate striking a new two-year low in the wake of the Reserve Bank of Australia’s (RBA) latest interest rate decision.

While the RBA raised rates by another 50bps following its September meeting, its forward guidance was very dovish in tone, with the bank signalling it may slow the pace of future hikes.

A weaker-than-expected domestic GDP release in addition to underwhelming Chinese trade figures kept the pressure on the ‘Aussie’ in the middle of the week.

However AUD exchange rates then rallied sharply at the end of the week, as a pullback in the US dollar lead to a marked improvement in market risk appetite.

The ‘Aussie’ has so far maintained this upward momentum at the start of this week, amid persistent risk-on flows.

The release of Australia’s latest jobs report could help to reinforce these gains later in the week if August’s figures point to another strong month of employment growth.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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