The Australian Dollar to US Dollar (AUD/USD) exchange rate has been able to find a range, trending within the 77 to 78 US Cents range. The ‘Aussie’ continues to find support at 77.0 US Cents hasn’t had the momentum to reach 78.0 US Cents.
At 11:30 AEST Tuesday, the Minutes of the June Monetary Policy Meeting of the Reserve Bank of Australia (RBA) were released with little surprise. The RBA board elected to keep the Official Cash rate on hold at 2.0% at the June meeting.
As has been stated time and again in previous meeting minutes throughout 2015, the board suggested that further depreciation of the Australian Dollar was needed to stimulate the economy especially off the back of falling commodity prices. The minutes stated that “the exchange rate was close to the lowest levels seen earlier in the year, but members noted that the current level of the exchange rate, particularly on a trade-weighted basis, continued to offer less assistance than would normally be expected in achieving balanced growth in the economy. A further depreciation therefore seemed both likely and necessary, particularly given the significant declines in commodity prices over the past year.”
RBA Assistant Governor for Economics Christopher Kent told an audience at ANU in Canberra on Monday that monetary policy is “clearly working” to support demand, “although it is working against some strong headwinds”. He went on to say that the Australian Dollar “continues to offer less assistance than would normally be expected in achieving balanced growth in the economy”. The question now is what will the RBA do next? It’s clear from both the minutes of its June meeting and monetary policy statement that they are now in ‘watch-and-wait mode” to see whether further policy easing will be required.
At 08:00 AEST the Australian Dollar to US Dollar (AUD/USD) exchange rate was at 77.50 US Cents.
Australian Dollar to Euro (AUD/EUR) exchange rate remains strong over Greek debt crisis.
The Australian Dollar is higher as global focus remains on Europe and Greece’s stalled negotiations over its debt obligations. The Australian Dollar (AUD) rallied on Monday night, supported by minor increases in gold prices, as the US Dollar declined following the release of disappointing economic data.
German ZEW Economic Sentiment provided the AUD/EUR Exchange Rate with further support overnight with a result below expectation and forecast at 31.5, the previous figure had been significantly better at 41.9, with the forecasted result at 37.5.
In Europe, Greece tried to drag loan talks with its European Union (EU) and International Monetary Fund (IMF) creditors back from the brink after negotiations collapsed over the weekend in Brussels, and left the country just two weeks away from a catastrophic default on its debt.
At 08:00 AEST the Australian Dollar to Euro (AUD/EUR) exchange rate was at 0.6892.
The AUD/GBP Exchange Rate sustains further losses with UK CPI back in the positive
The Australian Dollar to UK Pound Sterling Exchange Rate has continued its downward trend overnight losing a further half a percent with the release of the UK’s latest Consumer Price Index figure (CPI), the result was a conservative 0.1% increase.
The significance of this figure however in relation to last month’s figure which made news globally with a negative inflation figure of -0.1%. This was the first time the CPI figure for the UK had fallen below zero since 1960. Major economists and UK Politicians spoke at the release, the majority making comment that this figure was not to be confused as deflation but a short term negative inflation as a result of global fuel prices. The result this month further substantiates these comments.
The week will continue to be UK focused for this currency pairing with the Bank of England (BoE) Monetary Policy Committee (MPC) official bank rate votes. The previous month was unanimous for 9 votes to hold the rates; however media interviews that followed last month’s result did comment that there were some members that were considering changing their votes. Any variation to the vote could cause the Pound to rally further against the ‘Aussie’.
The AUD/GBP Exchange Rate is currently trading at 0.4953 at 8:30 AM AEST Today.