The Dollar Rose on Australian Rate Cut
October 01, 2019 | Monday
The dollar surged to within touching distance of a new two-year high in early trading on Tuesday. It surged against the Australian and New Zealand dollars after the Reserve Bank of Australia cut its key cash rate to an all-time low of 0.75%.
After the RBA's move, the dollar rose almost a cent against the Aussie. It came after the economy grew at its slowest rate in a decade in the second quarter. It's also another spillover from the U.S.-China trade war that damped Chinese demand for Australian commodities. Besides, it also hit a new 10-year against the kiwi.
The dollar index climbed to as high as 99.21 close to the two-year high of 99.33 it hit last month. Dollar index measures the greenback against a basket of six developed currencies. That was when it hit a 10-year high against Australia. The chief economist for Asia-Pacific at ING says further price movements may depend on Governor Lowe's remarks at a dinner in Melbourne. Also, he may choose to finesse expectations for future rate movements or provide more clarity on the focus on consumer spending.
Furthermore, after a worse than expected Tankan survey, the dollar rose against the yen. On the contrary, it moved higher against the euro and sterling as crunch time approached in the Brexit drama. On Tuesday, The Daily Telegraph reported that Prime Minister Johnson would send his detailed plans for escaping a hard border on the island of Ireland to the EU. The plans involve a string of customs clearance centers set a few miles back from the border. That effectively breach the Good Friday Agreement that the U.K and EU both promised to respect. Moreover, the euro was at $1.0890, up to ten ticks from a new two-year low it hit at the start of trading.
Loving what you've read now and want to have more news similar to this? Send your contact details here. Need to advertise your business? Connect with us now, and we'll be glad to help.