Aussie kicked into touch by dovish RBA

Currencies Direct July 30th 2013 - < 1 minute read

The Australian dollar plunged against its US counterpart on Tuesday (30 July) after dovish comments from the country's central bank chief.

AUD/USD had collapsed 1.5% to 0.9066 as European markets opened, the pair's lowest in a fortnight and close to a three-year low plumbed on 12 July.

The Aussie came under severe pressure after Reserve Bank of Australia (RBA) governor Glenn Stevens said the current inflation trend suggests there is still room to cut interest rates.

"Recent inflation data do not appear to have shifted," he said in a speech in Sydney. "The recent decline in the exchange rate seems to make sense from a macroeconomic perspective. It would not be a major surprise if a further decline occurred over time."

With the Aussie on the slide, investors are betting the RBA will cut its benchmark rate by a quarter percentage point at next week's policy meeting.

The Aussie was also sharply lower against the pound, with GBP/AUD climbing 1.5% to 1.6920.

Since April, the Australian dollar has lost around 10% against Sterling and the Greenback.

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Currencies Direct

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