Tuesday, 7 Sep 2010

AUD Declines Despite Political Stability after Elections

The Australian dollar got hit by the news today that the country's Labor Party has finally been able to claim victory in the general election over a week ago, and that the Reserve Bank of Australia (RBA) left interest rates as well as the outlook for the economy unchanged.

The Aussie declined despite news that Labor leader Julia Gillard was finally able to claim victory should remove political uncertainty hanging over the currency, as this probably means that the mining tax that has been worrying investors will remain on the books.

Meanwhile, the RBA left its rates unchanged at 4.50% and offered little change to its previous outlook for the Australian economy. However, the central bank did express some concern about U.S. growth later this year and European growth next year.