The Australian dollar against the US dollar has been declining for three days in a row. The current quote is 0.6689.
Aussie got under pressure after the governor of the Reserve Bank of Australia Philip Lowe announced the decision to make a pause in lifting the interest rate. Before that, the rate had grown ten times in a row.
According to Lowe’s comments, the debt of households restrains their consumption. Spending is slowing down, and the RBA gets more time to assess the situation in the economy and its prospects in serious uncertainty.
For borrowers, the pause in the tight structure of the RBA’s credit and monetary policy is a good signal. However, for the AUD it is definitely not, though today reactions look excessive.
The thing is, a pause in increasing the interest rate does not mean it will stop altogether. The RBA is trying to win some time. Later the regulator is very likely to have to lift the rate again. This must stabilise the AUD. Additionally to such support, weakness of the USD also provides a foothold for the AUD.