Australian Dollar, also known as Aussie went down to the lowest value of the same in the last 3 years against USD after the approvals for home loan grew at the slowest pace in the last 3 months. This has boosted the chances of further cuts in the borrowing costs. Aussie thereby has slid down for the 3rd straight day as there are speculations that the Federal Reserve will be reducing the monetary stimulus in 2013. The interest rate average of Australia has narrowed down as well. Incidentally, not against USD, but Aussie went down against Yen as well, after the Bank of Japan kept the monetary policy of the same unchanged. This has disappointed the investors who were expecting that there will be new measures introduced by the Japanese Government to stem market volatility. Incidentally, the major currency of New Zealand, New Zealand Dollar or Kiwi is set to have the lowest close of the same in a year as well.
Foreign Exchange Strategist of Commonwealth Bank, Joseph Capurso, stated that the housing industry is one area which is most likely to make up for the downturn in the mining investment, however, the results of the same has not been pretty encouraging so far. Capurso added that given the current circumstances, Aussie will go down even further.
Aussie has gone down by 1.1% on today and it is currently priced at 93.61 US Cents. At one point of time, it touched 93.54 marking the weakest figure of the same since September, 2010. On the other hand, Kiwi went down by 0.9% against USD and it is at 78.34 US Cents currently. Kiwi is all set to have its weakest close since June, 2012. On the other hand, against Yen, Aussie was down by 1.6% and is at 92.02 Yen. Kiwi also tumbled by 1.4% and is at 76.94 Yen.
The home loan approvals of Australia increased by 0.8% in April, if compared to figures of March. This is the smallest increase of it since last January. Economists predicted an increase of 2%; however, the actual figures are way below that. Incidentally, the gain for March was adjusted to 4.8%, from its previous value of 5.2%. On last month, the Governor of the Bank of Australia Glenn Stevens reduced the overnight cash rate target to a record figure of 2.75%.