Australian Dollar Weakens As RBA Debelle Dampens Rate Hike Talk
July 20 2017 - 10:00PM
RTTF2
The Australian dollar slipped against its key counterparts in
the Asian session on Friday, after the Reserve Bank of Australia's
Deputy Governor Guy Debelle remarked that Australia's interest rate
need not increase automatically with the tightening of other
central banks.
"Just as the policy rate in Australia did not need to decline to
the very low levels seen in other parts of the world, the fact that
other central banks increase their policy rates does not
automatically mean that the policy rate here needs to increase,"
Debelle said in Adelaide.
There was a discussion of the neutral rate at the most recent
Board meeting. No significance should be read into the fact that
neutral rate was discussed at this month's meeting, he added.
"Most meetings, the Board allocates some time to discussing a
policy-relevant issue in more detail, and on this occasion it was
the neutral rate," said Debelle.
Asian markets are trading mixed amid U.S. policy uncertainty and
as European Central Bank President Mario Draghi remarked that
discussions to potential changes to the central bank's quantitative
easing would take place in the autumn.
Media reports that U.S. special counsel Robert Mueller is
expanding the Russia probe to include President Donald Trump's
business dealings added to uncertainty over prospects for U.S.
healthcare reform.
The aussie showed mixed performance on Thursday. While the
currency held steady against the greenback and the yen, it fell
against the kiwi and the euro.
The aussie depreciated to a 3-day low of 0.7875 against the
greenback, reversing from a high of 0.7959 hit at 5:45 pm ET. The
aussie-greenback pair is likely to find support around the 0.76
region.
Pulling away from an early high of 89.03 against the yen, the
aussie dropped to a 3-day low of 88.15. If the aussie extends
decline, it may target support around the 86.00 level.
The aussie dropped to 3-day lows of 1.4762 against the euro and
0.9920 against the loonie, off its early highs of 1.4610 and
1.0021, respectively. Continuation of the aussie's downtrend may
see it challenging support around 1.49 against the euro and 0.985
against the loonie.
The aussie hit a weekly low of 1.0624 against the NZ dollar,
compared to 1.0753 hit late New York Thursday. The aussie is poised
to locate support around the 1.05 level.
Figures from Statistics New Zealand showed that New Zealand's
net migration increased in June from a year ago.
In the year to June 30, net migration reached a new record high
of 72,305, up from 69,090 in the same period of 2016.
Looking ahead, U.K. public sector net borrowing for June is set
for release in the European session.
Canada CPI for June and retail sales for May are due in the New
York session.
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