After traders digested the information on the RBA’s meeting minutes, the Australian money immediately contracted in sessions. But prior to today’s mess up, the Aussie was benefiting from trade war pessimism.
Aside from that, the lackluster figures from the Australian economy are making it hard for the Aussie to stay firm. Yesterday, the Australian Bureau of Statistics released the country’s home loan record showing contraction from 1.4% prior to 0.6% on a month-over-month basis.
As of writing, the Australian dollar contract fell by 0.39% or 0.0027 points in trading sessions. The RBA news also affected the kiwi, pushing the New Zealand dollar contract lower by 0.41% or 0.0027 this Tuesday.
Moreover, the AUD NZD exchange rate slipped by 0.11% or 0.0011 points in trading sessions. The current pair exchanges for NZ$1.0421, descending from its last close of NZ$1.0432.
Meanwhile, when pinned against the greenback, the Australian money did not stand a chance. The pair’s fate was sealed thanks to AUD’s vulnerability from the RBA minutes, and trade war news backing the USD.
The AUD USD exchange rate plunged by 0.49% or 0.0032 points this Tuesday’s trading. The pair extended its losses from $0.6886 to $0.6845 during the sessions.
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What’s in the RBA’s Minutes?
The official minutes from the Reserve Bank of Australia showed that policymakers would reassess the Australian economic outlook. The reassessment is due on February 2020’s meeting and is deemed necessary b the bank to decide further actions.
The reassessment results in the previous rate cuts would depend if the RBA’s “gentle turning point” is still evident. That would be challenging since weaker-than-expected Q3 GDP results, and the upsetting October retail sales figure will weigh on it.
Aside from that, the leading cause of the downfall of the Australian money is the signal for further cuts. The RBA’s minutes indicated that the bank is willing to ease its monetary policy if needed.
This raises concerns for the Aussie’s outlook for the first few weeks of trading in 2020. Still, risk appetite from the trade war could buoy or prevent the currency from plummeting in the coming sessions.
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