Aussie declines to three-year low

The Australian dollar is at a three-year low against the US dollar following comments from Glenn Stevens of the Reserve Bank of Australia.

Mr Stevens said he is surprised it took so long for the Australian dollar to drop to its current level considering that the country's interest rates are at an all-time low.

Mr Stevens also stated that a weaker Australian dollar is good for the Australian economy as it makes their exports more competitive. Australia is trying to shift focus away from the mining sector to assist domestic businesses, and some traders feel that the RBA could cut interest rates in the next few months, which is likely to put further pressure on the Australian dollar in the months to come.

US weekly jobless claims are released a day early this week with the Independence Day holiday in the US tomorrow. The 1.30pm (London time) announcement is expected to show the number of people claiming unemployment benefit fell by 1000. If there is a larger drop in claimants, we could see the Australian dollar slide below the $0.9 mark.

Spot FX AUD/USD (DFB) chart

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