The Australian dollar fell to around $0.62 on Friday, reaching its lowest point since October 2022, as investors brought forward expectations for the first rate cut by the Reserve Bank of Australia (RBA) due to signs of slowing economic activity.
Australian dollar fall to around $0.62
Markets are now pricing in the possibility that the RBA may start cutting its 4.35% cash rate as early as February, with the upcoming meeting minutes expected to provide more clarity. Meanwhile, data revealed that private sector credit in Australia increased by 0.5% month-on-month in November, the fastest growth in four months.
Pressure from the US dollar
Externally, the Aussie faced further pressure from a strong US dollar after the Federal Reserve implemented a widely expected 25 basis point rate cut on Wednesday, while signaling fewer rate cuts for 2025. Additionally, China’s central bank kept key lending rates unchanged, offering no fresh economic stimulus for Australia's largest trading partner.
