By: Barbara Zigah
The Australian Dollar struck an 11-week trough against the U.S. Dollar following an unexpected outcome in balance of trade figures. According to expectations, Australia was to have posted an AUD1 billion surplus in February but the data revealed in fact that a trade deficit in the amount of AUD480 billion was posted rather, news that supports the strong probability that the Reserve Bank of Australia might now have to consider a rate cut at next month’s meeting. Earlier this week, the RBA left their monetary policy unchanged, with the benchmark cash rate fixed at 4.25%; the statement which accompanied the announcement said that the central bank would monitor the economic situation closely and be ready to act.
As reported at 12:57 p.m. (JST) in Tokyo, the AUD/USD pair was trading at a low of $1.0263, the lowest price since mid-January, before recovering to $1.0279 – still a 0.5% decline from late trade in New York. Analysts believe that if the pair drops to below $1.0261, the next support could be at $1.0120.
The fall in the Aussie had a spillover effect on the Euro which slipped to $1.3184, before recovering to $1.3196 still a decline of 0.3%. Analysts say that markets are extremely sensitive to any signs of additional easing, and yesterday’s comments by a U.S. Federal Reserve Bank official disappointed markets which had been hopeful for more hints on additional stimulus. The ECB will hold their monthly meeting today and analysts expect that there will be no changes there to monetary policy.
Aussie Dollar Slips Hard on Trade Data
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.