Soft sentiment surveys sink Aussie dollar to seven-month low
SYDNEY: The Australian dollar was pinned to a seven-month low on Wednesday and trailing peers as grim economic surveys reinforced bets that local interest rates have peaked, while a hot US inflation reading raised expectations for a sharp move higher in US rates. Overnight, only the oil-linked Norwegian krone fared worse than the Aussie when a hotter-than-expected US inflation reading set off a…
Sydney, Australia - The Australian dollar hit a seven-month low of $0.6844 on Wednesday, sliding 0.9% as economic surveys painted a grim picture of the local economy. Consumer sentiment reached a four-year low in November, while business conditions stayed in negative territory. These alarming indicators have fueled speculation that Australia's interest rates may have peaked, with traders pricing in a potential 25 basis point rate cut by the end of next year.
The US inflation data released overnight, which came in hotter than expected at 0.3% for October, has added to the pressure on the Aussie dollar. This surge in the US dollar saw the NZ dollar gain ground and hold steady at $0.5605 overnight, benefiting from the prospect of three 25 basis point interest rate hikes through 2027.
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