Forex: AUD/USD falls on RBA Interest Rate Decision

on Jul 2, 2013
Listen Tuesday July 2nd:_ The AUD/USD opened the Asian session today at 0.9240 and ahead of the European opening had fallen to 0.9151, decreasing 0.89 percent for the day so far.

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The Australian dollar has fallen to a near three-year low today after the Reserve Bank of Australia decided to keep its key interest rate unchanged at a record-low 2.75 percent, intimating its view that the AUD could drop further.

For its part, the USD held firm near four-week highs against the other majors, supported by the ever-present speculation these days that an end is in sight for fiscal stimulus in the US, with attendant increase in bond yields.
RBA governor Glenn Stevens stated the central bank’s view that the Aussie “remains at a high level”, despite its sharp drop of 10 percent since early April. Stevens opined that the fall had been helpful for the Australian economy as it seeks to reduce its reliance on mining and grow manufacturing exports. Stevens also noted the possibility that “the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy”.
Traders await US Factory Orders for May m/m, due out at 15:00 BST today.


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