The Australian dollar posted the biggest weekly loss since 1985 against the U.S. dollar this week, as the traders dumped their positions in the high interest rate currencies, while the situation with the global financial system remained uncertain.
The U.S. dollar continued to grow today for the fourth day against the euro on speculation that the problems are more serious for the European economy than for the United States, thus the rate differential may switch to the dollar’s favor.
Both Australian and New Zealand currencies continued to fall against the U.S. dollar today as the traders’ confidence that the central banks of those countries will cut interest rates soon rose and the dollar continued its growth against euro, pound and yen.
The New Zealand dollar fell significantly against the other currencies today after the release of the report that showed that the home-building approvals in the country declined to the lowest level in almost 22 years in June.
The New Zealand dollar fell to its 6-month low level against the U.S. dollar after the Reserve Bank of New Zealand cut the interest rate by a quarter percent point in its first rate reduction in the last five years.
The New Zealand dollar went for a third day of losses today on the Forex market, making this week a biggest drop since mid May, as the Reserve Bank of New Zealand Governor Alan Bollard said that he may cut interest rates this year.
The New Zealand dollar rose today against all other major currencies at a fastest pace in months as the Finance Minister Michael Cullen cut the income tax supporting the national economy.
The Reserve Bank of New Zealand Governor, Alan Bollard, said yesterday that he won’t be reducing the country’s key interest rate from its record high value in 2008, because the national inflation still remains the major concern.
Both Australian and New Zealand dollar continued to rise today after the yesterday’s fast growth as the investors remained confident in the stock markets’ improvement and in the carry trade.
According to Australia’s largest mortgage provider, Commonwealth Bank of Australia, the U.S. dollar will perform worse than experts previously expected for this year.