The Australian dollar is weaker after a Reserve Bank official hinted at another rate cut.
At 0700 AEDT on Wednesday, the local currency was trading at 85.20 US cents, down from 86.02 cents on Tuesday.
It had earlier touched levels last seen in July 2010.
The unit fell on Tuesday night after RBA deputy governor, Philip Lowe, said rates could be cut again if necessary.
“I don’t think we’re there yet. So, we’re in a fortunate position that if we do need to lower interest rates we can,” he told an economists’ dinner in Sydney.
Bank of New Zealand strategist, Kymberly Martin, said Dr Lowe’s comments reaffirmed to markets that another rate cut was possible.
“People do assign a probability to that happening,” she said from Wellington.
Lowe also described the Australian dollar as overvalued, which Martin said “didn’t help the Aussie dollar in any way”.
Martin said US economic growth figures, showing a robust 3.9 per cent annual growth pace in September, did little to improve the greenback, while the euro had strengthened for technical reasons.
AAP
