Currency Note Worldwide

Australia cuts interest rates

By Smart Currency August 6th, 2013

Elsewhere, eyes were on the Antipodean nations, where both the New Zealand and Australian dollars struggled yesterday. In New Zealand the slide was a response to Fonterra Group, the New Zealand-based, world’s-largest milk exporter, confessing that a recent batch of exports were infected with a deadly bacteria. This in turn lead to China and Russia imposing import halts on all dairy products coming out of New Zealand. With the dairy industry accounting for some 25% of New Zealand’s total exports, the news had a marked impact on the trade-reliant nation’s currency. The Australian dollar also struggled, sliding to near three-year lows against the US dollar. The slide was attributed to retail sales coming in worse-than-forecast, boosting odds for interest rate cuts being implemented by the Reserve Bank. Overnight we saw the Reserve Bank of Australia cut interest rates by 0.25% and we saw a slight rebound in the value of the Australian and New Zealand dollars but these gains could be short lived as their problems seem to be growing. The Japanese yen performed well yesterday, as investors bought in to the safe-haven currency following uncertainty in the markets – pushing the yen up to four-day highs against the US dollar. Today, we have influential trade balance data out of Canada, and late this evening we have quarterly unemployment data out of New Zealand. Get in touch for the latest rates.