Australian Dollar closes with a fall
With investors squaring USD positions before three day extended weekend in US, Australian dollar backpedaled and closed at $US0.8600. Audtralian dollar was being traded at $US0.8609/11 at 1700 AEST, which was down from last day’s closing volume of $US0.8674/78. the day also witnessed a movement of local currency amid a low of $US0.8605 and high to $US0.8660.
Positining its way up through fridday’s session,in mid-afternoon australian dollar reached an intrady high of $US0.8660 being dealt in a situation with serene USD weakness. The last 90 minutes saw fall of the Australian currency, as investors in United States were getting ready for the long weekend with a public holiday of Labour Day on Monday and another round of US data.
Jonathan Cavenagh, Westpac currency strategist, said that the overnight fall or come back of Australian dollar comes after a series of ups in last few domestic sessions. He also said that another reason could be avoiding of volatility by many investors due to the surprising data of the week.
Friday night’s US data consists of personal income as well as spending statistics for the month of June; the data also includes Chicago PMI for the month of August.
On Tuesday a meeting is expected between Reserve Bank of Australia (RBA) and Australian Bureau of Statistics. The agenda of meeting is to publish gross domestic product (GDP) of June quarter. With expectation from RBA on sitting down of cash rate by 25 basis points, Jonathan also said that market is looking for hints on how worried central bank about growth and expansion prospects of Australia. The cash rate is currently 12 year high of 7.25 percent. Jonathan added that market will focus more concern of Reserve Bank of Australia about further growth and possibilities of more cuts. Following a decision made by Reserve Bank of Australia board on Tuesday, it was anticipated that Australian dollar would trade somewhere between $US0.8500 and $US0.8700.
Behind of Thursday’s close of 67.9, the Reserve Bank of Australia’s trading weighted index was observed at 67.7 at 1600 AEST.