The Aussie fell the most in the week to the US Dollar and the Yen, after the central bank Governor stated that the interest rates were close to average, this dampened speculation over whether interest rates will be increased once again.
The Aussie weakened compared to the other 16 major counterparts after Governor Glenn Stevens said policy makers need to focus on making sure that the economic recovery is long-lasting and that inflation stays within the target range.
The Central Bank of Australia was responsible for the world’s most aggressive round of interest rate increases, by increasing the interest rates 5 times in only 6 meetings amid clear evidence that the economy is recovering. Inflation does not seem likely to slip below the bank’s target range of the 2 to 3%.
Import prices increased for the first time for the March quarter, this is the first increase since the end of 2008. Export prices increased 3, 8% in the 1st quarter period but remain lower than last year in the same period by 26, 8%.
Import prices on the other hand rose 0.3% and remain 12, 9% lower than last year. More increases are expected to flow through in the coming months.
The Kiwi and the Aussie both fell against the Yen after the EU stated that Greece’s budget deficit was twice as wide as what it was previously estimated to be, squashing the demand for higher-yielding assets.
The Euro also fell to its lowest level in just under a year, since the prospect of the nation now accepting a bailout package has substantially increased.
AUD/ GBP: 0.6029
AUD/ EUR: 0.6965
AUD/ USD: 0.9273
AUD/ JPY: 86.517
Exchange rates as of 08:54, 23 April 2010
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