Australian Dollar, the major currency of this Asia Pacific country has reached a 1-month low value after commodity prices and stocks declined, thereby reducing the investor appetite for the riskier assets. The Government bonds of Australia increased, thereby sending the 10-year yield to the lowest figure in the last 4 months. Incidentally, both Australian and New Zealand Dollars held declines against Yen from yesterday as the International Monetary Fund decided to cut the global growth forecast, citing the lagging recovery in Europe to be the reason.
According to the Analyst of Gaitame.com Research Institute, Takuya Kawabata, both Aussie and Kiwi are currently hit after stocks and commodity prices experienced a decline. He added that the Reserve Bank of Australia shows no signs of urgency of cutting the rates at the current moment. However, if consumer prices drop big time or the global growth turns out to be lackluster, the expectations of further easing will be boosted.
Australian Dollar is currently trading at $1.0306 from its yesterday’s value of $1.2097. It even touched a value of $1.2069 earlier, which marks the lowest figure since 12th March. Australian Dollar, on today, traded at 101.09 Yen from 101.03 Yen. If it comes to New Zealand Dollar, also known as Kiwi, the currency has declined by 0.6% against USD and is currently priced at 84.43 US Cents. Against Yen, it is currently trading at 82.80 Yen.
The yields for the last 3 years in Australia have reached 2.68% now, marking its lowest since 24th January. On the other hand, the 10-year yields declined by 9 basis points as well to 3.17%, the lowest in last 5 months. The MSCI Asia Pacific Index declined by 0.5%, after the MSCI World Index decreased by 1.3% as well.
International Monetary Fund has already trimmed the global growth forecast to 3.3% on this week for 2013, from the estimate that it made in January, that of 3.5%. On the other hand, the growth projection for China was also declined to 8%, from its earlier projection of 8.2%. Incidentally; China is the biggest trading partner of both New Zealand and Australia.
The minutes of the 2nd April meeting was released by the Australian Central Bank where it reiterated that the Australian Dollar remains high and the current inflation outlook gives policy makers enough room for cutting down borrowing costs.