Forex - AUD/USD lower after Stevens comments

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Investing.com - " The Australian dollar traded lower against the U.S. dollar during Tuesday's Asian session after Reserve Bank of Australia Governor Glenn Stevens said he believes the Aussie will weaken in the future.

In Asian trading Tuesday, AUD/USD fell 0.29% to 0.9546, near a two-week low. The pair was likely to find support at 0.9528, the low of October 17 and resistance at 0.9671, the high of October 24.

Stevens said the Aussie could be "materially lower" in the future. Despite Tuesday's loss, the Aussie is still the best-performing developed market currency against the greenback this month.

"The foreign-exchange market is perhaps another area in which investors should take care. It seems quite likely that at some point in the future the Australian dollar will be materially lower than it is today," Stevens said in a speech in Sydney today.

Stevens also said he expects the Federal Reserve will taper its easing program at some point, thereby strengthening the greenback.

While Stevens tried to talk to Aussie lower Tuesday, RBA has been active on that front through a series of rate cuts over the past two years. However, the Aussie is seen as about 10% overvalued relative to it historical averages.

RBA is desperate to engineer growth from non-mining sectors of the Australian economy, the world's 12th-largest, but that growth has yet t materialize. Even with that, most traders do not believe RBA will cut rates again in the coming months.

Elsewhere, AUD/JPY fell 0.36% to 93.19 while AUD/NZD lost 0.17% to 1.1512.


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This article appears in: Investing , Forex and Currencies

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