The Australian dollar was trading at $US0.8955 in afternoon trade on 7 February 2008. The decline from its value of $US0.9076 in the previous trading session, followed the release of the latest report from the US Institute for Supply Management (ISM). It is thought that the ISM data has hurt the Australian dollar by increasing risk aversion and prompting share sales. However, Jonathan Cavanaugh of Westpac says $US0.8950 is actually a "very important technical support level" for the Australian currency. Cavanaugh has suggested that ISM reports could eventually be good for the dollar, in that they could potentially prompt further US interest rate cuts, which would result in an even wider interest rate differential between Australia and the US.
|
