Investing.com – The Australian dollar is trading modestly lower against its U.S. rival during Friday’s Asian session after the International Monetary Fund said the Aussie is overvalued.
In Asian trading Friday, AUD/USD fell 0.03% to 1.0300. The pair was likely to find support at 1.0270, the session low and a five-week low and resistance at 1.0368, the high of February 20.
In remarks made Thursday, Min Zhu, deputy managing director of the IMF, said the Aussie is overvalued by 10% from "a medium-term point of view." The comments jibe with those recently made by the Reserve Bank of Australia, which has said the strong currency is hampering economic growth in the world’s 12th-largest economy.
Still, traders see only a one-in-three chance that RBA will lower interest rates when it meets early next month. RBA has passed on rate cuts following its most recent meetings after a spate interest reductions starting in late 2011 and going through late 2012 took Australia’s benchmark interest rate to 3%. That is still among the highest in the developed world.
Zhu said RBA has room to further lower rates, but earlier this week, Australian Treasurer Wayne Swan said many developed world economies have become overly dependent on monetary policy as a means of boosting economic growth.
Regarding the New Zealand dollar, Zhu made similar comments, but did not appear convinced that country is heading for a real estate bubble.
Global growth concerns have both the Aussie and the kiwi headed for weekly losses against nearly all of their major counterparts.
Meanwhile, AUD/NZD fell 0.13% to 1.228 while EUR/AUD rose 0.08% to 1.2682. AUD/JPY inched lower by 0.02% to 101.10.
In Asian trading Friday, AUD/USD fell 0.03% to 1.0300. The pair was likely to find support at 1.0270, the session low and a five-week low and resistance at 1.0368, the high of February 20.
In remarks made Thursday, Min Zhu, deputy managing director of the IMF, said the Aussie is overvalued by 10% from "a medium-term point of view." The comments jibe with those recently made by the Reserve Bank of Australia, which has said the strong currency is hampering economic growth in the world’s 12th-largest economy.
Still, traders see only a one-in-three chance that RBA will lower interest rates when it meets early next month. RBA has passed on rate cuts following its most recent meetings after a spate interest reductions starting in late 2011 and going through late 2012 took Australia’s benchmark interest rate to 3%. That is still among the highest in the developed world.
Zhu said RBA has room to further lower rates, but earlier this week, Australian Treasurer Wayne Swan said many developed world economies have become overly dependent on monetary policy as a means of boosting economic growth.
Regarding the New Zealand dollar, Zhu made similar comments, but did not appear convinced that country is heading for a real estate bubble.
Global growth concerns have both the Aussie and the kiwi headed for weekly losses against nearly all of their major counterparts.
Meanwhile, AUD/NZD fell 0.13% to 1.228 while EUR/AUD rose 0.08% to 1.2682. AUD/JPY inched lower by 0.02% to 101.10.