The Australian Dollar Holds Steady But Remains Under Pressure

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Updated: Dec 21, 2016, 12:41 UTC

The Australian dollar is trading steady in today’s trading, still reeling from yesterday’s Federal Government mid-year economic update which showed a

Australia might lose its precious triple AAA credit rating

The Australian dollar is trading steady in today’s trading, still reeling from yesterday’s Federal Government mid-year economic update which showed a budget deficit out of control.

At 12.30pm (GMT) the Aussie dollar was trading at 0.7268 up 0.10% from yesterday’s trading, rising from lowest level of 0.7240 earlier today.

The local currency has now racked up 5 days of continuous losses which was triggered by the US Federal Reserve slashing interest rates last Wednesday followed by an unexpected statement that they would probably cut rates 3 times next year instead of the expected 2.

With yesterday’s announcement of a blown out budget deficit as well as recent disappointing GDP figures, some are now predicting Australia will lose its precious triple AAA credit rating from one of the recognized ratings agencies as early as this week

“Given what’s gone on in recent weeks, we’ve had a negative GDP print for the last quarter, the construction work done was the worst in 15 years, wages growth has been terrible, full-time employment is waning and business investment has been terrible as well.” noted Angus Coote, the co-founder of Jamieson Coote Bonds,

He also mentioned that there is a “reasonably high” chance that the Australian economy would be downgraded by at least one of the agencies. “They are certainly looking at us,” he said.

Also pressuring the Aussie dollar today was a fall in commodity prices overnight with the price of copper leading the way followed by Iron ore, Australia’s biggest export,

“Base metals again came off fairly aggressively yesterday, with copper leading the charge, that’s also been weighing negatively on sentiment,” OANDA Australia and Asia Pacific senior trader Stephen Innes