Bank of Australia Lowers Rates

It would seem as if the world is conspiring against the Australian Dollar. In the last couple months, the currency has plummeted nearly 20% from the 25-year high it had reached against the US Dollar. A combination of global economic weakness, falling commodity prices, and a trend towards risk aversion have turned the tables in favor of currencies perceived as more stable in times of crisis. To add insult to injury, the Central Bank of Australia decided to cut its benchmark lending rate, narrowing the interest rate differential that had been partially responsible for the Australian Dollar’s multi-year appreciation. Bloomberg News reports:

"In the near term, the question will be do we hold here or go down a bit more on interest rates?” said [Central bank Governor Glenn] Stevens.