The policy makers affirmed that interest rates may not increase further in the short term, this decreased attractiveness for the Aussie dollar in currency markets.  In this week  a significant decline has been recorded in the Australian dollar and it may extend its losses against currencies like the U.S. and the Canadian dollar.

Australian Dollar ranked among the top performing currencies in 2009

Among world’s wealthiest nations Australia was the first country which has raised interest rates this year showing resilience after the most severe global economic crisis since the Second World War affected financial markets last year.

This has provided support for the national currency to rank among the top performers among currencies in 2009.

No further interest rates Hikes

This week, it has been stated by the Reserve Bank of Australia Deputy Chairman of the Board Ric Battellino that their might not be any further interest rate hikes for the next months. This has ended a series of raises that helped the Aussie to grow in currency markets, and it has also helped in shifting the sentiment towards the mid term price estimates for the South Pacific currency.

Further decline is expected against Greenback

Analysts are doubtful regarding the Aussie’s trends, and it is expected that a rally that set the currency to levels as high as 0.93 against the greenback is unlikely to follow. This is due to the reason that not only the Australian dollar’s appeal tumbled, but also currently more favorable reports are being provided by other economies around the world, causing a capital outflow from the South Pacific nation. This may leads to a further decline in the Australian currency specially against the greenback and the loonie.

AUD/USD

AUD/USD closed the week at 0.8892, five days ago it was as high as 0.9175.

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