Open trading account 
This week was replete with macroeconomic data releases that shaped the trends for exchange rates. The Australian dollar was not the role model for the currency, influenced by the slew of these reports. Unlike for other currencies, the trend for AUD seems to be persistent for a long time to come.
The assertion of that sort, not immediately obvious, is rather plausible if dynamics of AUD over the course of last week is considered in context of GDP report and interest rate decision by RBA.
In its Minutes, published last week, RBA officials once again affirmed that the main course to fend off economic slump is through currency devaluation. Albeit the interest rate was kept intact at 2.5%, AUD extended its losses not only against USD but also against other majors – GBP, CAD, EUR. This down trend was set after disappointing GDP data for the third quarter were released. The main rationale behind these rather poor data is low prices for commodities – the main export of Australia. The same rationale is being used as explanation of falling AUD. The RNA officials have been very explicit about it – the current at that time level of 0.85 USD was considered as being fundamentally overvalued.
Indeed, when poor GDP data were reported, the expectations of further interest rate dynamics shifted – it seems that in an attempt to spur economic growth RBA might slash interest rates in the nearest future. In this case, the down trend for AUD might be extended for significant period of time.
The assertion of that sort, not immediately obvious, is rather plausible if dynamics of AUD over the course of last week is considered in context of GDP report and interest rate decision by RBA.
In its Minutes, published last week, RBA officials once again affirmed that the main course to fend off economic slump is through currency devaluation. Albeit the interest rate was kept intact at 2.5%, AUD extended its losses not only against USD but also against other majors – GBP, CAD, EUR. This down trend was set after disappointing GDP data for the third quarter were released. The main rationale behind these rather poor data is low prices for commodities – the main export of Australia. The same rationale is being used as explanation of falling AUD. The RNA officials have been very explicit about it – the current at that time level of 0.85 USD was considered as being fundamentally overvalued.
Indeed, when poor GDP data were reported, the expectations of further interest rate dynamics shifted – it seems that in an attempt to spur economic growth RBA might slash interest rates in the nearest future. In this case, the down trend for AUD might be extended for significant period of time.
