Aussie dollar drops following interest rate cut

Published: 8 May at 9 AM Tags: Euro, Dollar,

An interest rate cut by the Reserve Bank of Australia saw the Aussie dollar drop to a two-month low. Predictions that the central bank could slash rates further saw the Aussie fall 0.7 per cent to $1.0165.

In neighbouring New Zealand the Kiwi dollar has also fallen after the central bank made complaints about the present strength of the currency. However, better than predicted industrial data from Germany saw the euro hit a peak of $1.3123. This follows a dip on Monday after Mario Draghi, head of the European Central Bank, said he would be prepared to push interest rates down further if economic data coming out of the eurozone was disappointing.

The euro is currently trading up 0.2 per cent against the yen at 130.23 yen. The US dollar is still struggling to rise above 100 yen and is currently remaining steady at 99.25 yen.

The Aussie dollar could recover if data released by its biggest export market China is positive. China is due to release figures relating to retail, industrial output, inflation and trade by the beginning of next week.

Although figures released by China for last month indicated a slow down, tightening efforts by the country’s central bank should abate any fears of a crash.