The Australian dollar got killed against the greenback after the Canadian central bank announced an interest rate cut.
Here’s the chart:
The trigger was an interest rate cut from the Canadian central bank, from its key interest rate of 1% to 0.75%.
This has led to a rush to buyers for the US dollar and a big sell on the Aussie.
The Australian central bank is enthusiastic about a fall in the currency’s value against the USD, with RBA governor Glenn Stevens last year saying US75c would be a useful level.
The huge move underlines two important themes in global markets: central banks remain powerful despite record-low interest rates everywhere, and rate cuts elsewhere can still favour the weakening of the Aussie dollar.