Aussie Dollar Slumps Amid Economic Uncertainty

Travelers and shoppers face challenges as the Australian dollar has dropped below 64 US cents, hitting 63.36 US cents, its lowest in nearly 13 months before a slight recovery to 63.9 US cents.

This decline is largely attributed to the Reserve Bank of Australia’s (RBA) decision to keep interest rates steady at 4.35% for the ninth consecutive meeting. RBA Governor Michelle Bullock highlighted the bank’s deliberate stance on inflation despite a weakening domestic economy.

Meanwhile, the US is exploring interest rate relief to boost growth. Senior financial analyst Kyle Rodda noted that US CPI data aligned with expectations, increasing the likelihood of a December rate cut. Core inflation rose by 3.3%, and the headline figure reached 2.7%, offering the Federal Reserve room to cut rates by 25 basis points.

In Australia, the release of November job data is crucial. Market analyst Tony Sycamore emphasized its importance following the RBA’s recent dovish approach. The economy is expected to add 25,000 jobs, with unemployment edging up to 4.2%. A weaker employment report could reinforce calls for an RBA rate cut in February.