Dollar hits one week low

 

chart,negative,red,graph,decreaseThe Australian dollar has hit a one week low after some negative comments on the local economy from the Reserve Bank of Australia.

At 0700 AEST on Wednesday, the local unit was trading at 93.36 US cents, down from 93.51 cents on Tuesday.

Late on Tuesday night, the currency fell as low as 93.34, its weakest level since June 9.

In the minutes of its June board meeting, released on Tuesday, the RBA said it was unclear how much the tough federal budget and expected declines in mining investment will impact the economy.

BK Asset Management MD, Kathy Lien, said the Australian dollar suffered the steepest falls among commodity currencies overnight.

She said the market was looking for the RBA to issue an upbeat outlook for the economy, which would have pushed the Australian dollar up to its high for the year of 94.60 US cents.

“Unfortunately, the minutes were slightly more and not less dovish, resulting in a steep decline in the Australian dollar,” Lien said.

Most currencies lost ground overnight as traders bought US dollars ahead of a statement from the US Federal Reserve on Thursday morning, Australian time.

The Fed is expected to announce an upgrade to its economic forecasts.

“A forecast of higher inflation and lower unemployment suggests that the Fed is moving closer to achieving their goals and if (Fed chair) Janet Yellen acknowledges that in her press conference, the US dollar should extend its gains against all major currencies,” Ms Lien said.

AAP

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