Australian Dollar Falls On Equities Slide

Australian Dollar Falls On Equities Slide


In the European session on Thursday, the Australian dollar weakened against other major currencies as European equities fell before Federal Reserve's policy meeting due later in the day.
The Fed is likely to maintain exceptionally low interest rates into 2015. Also, there remains uncertainty as to whether the Fed will start a third round of large-scale bond purchases, or quantitative easing.
Adding to concerns, ratings agency Fitch downgraded Queensland to 'AA' from 'AA+' with stable outlook.
"The state's fiscal position and debt matrix have deteriorated over the last four years and Fitch does not expect a recovery for at least two more years," it added.
Inflation expectations among Australian consumers remained unchanged in August, a survey by Melbourne Institute showed early in the day.
The median expected inflation rate remained at 2.4 percent in September. This is within the Reserve Bank of Australia's target band of 2-3 percent.
The aussie fell to 1.0432 against the U.S. dollar and 1.0192 against the Canadian dollar, down from an early high of 1.0490 and a 2-week high of 1.0239, respectively. If the aussie slides further, it may target 1.04 against the greenback and 1.015 against the loonie.
Against the NZ dollar and the yen, the aussie is trading at a 2-1/2-month low of 1.2716 and a 2-day low of 80.99 with 1.265 and 80.00, respectively seen as the next support levels. The aussie finished Wednesday's deals at 1.2754 against the kiwi and 81.50 against the yen.
The Reserve Bank of New Zealand today left its Official Cash Rate unchanged at 2.50 percent.
In a statement accompanying the rate decision, the RBNZ said New Zealand's economic outlook remains "broadly consistent" with its June policy statement.
The OCR has been 2.50 percent since March 2011.
The Australian currency remained weaker against the euro, hitting a 2-day low of 1.2380. On the downside, the aussie may break 1.245 level. The pair was quoted at 1.2330 at yesterday's close.
The U.S. weekly jobless claims for the week ended September 8 and PPI for August are expected in the early American session.