The Australian dollar is trading at around US87.00 cents today down from yesterday’s close of US87.17 cents after the RBA said that Intervention to bring the currency lower could not be ruled out.
RBA assistant governor Christopher Kent stated intervention to bring down the “too high” exchange rate was not off the table.
“He mentioned that “its above most estimates of its fundamental value, particularly given the substantial declines in commodity prices over the course of this year”.
Industrial production figures from China today came in at 7.7% against a consensus of 8% and once again showing that there are cracks appearing in the Chinese economy. This doesn’t hold well for the Aussie dollar because any slowdown in the Chinese economy is going to have a knock on affect in Australia as China is the country’s biggest trading partner.
“A continuation of such poor data can only pressure the Aussie dollar,” claim analysts at Fibogroup
“Any slowdown in China will only reduce demand for Imports into the country which Includes Australia’s largest export Iron ore which is already sitting at a six year low”
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