The Australian dollar is almost half a US cent lower after global investors reacted to yesterday' s interest rate decision.
At 7am AEST the currency was trading at 96.50 US cents, down from 96.93 cents at yesterday’s local close. The Reserve Bank of Australia (RBA) yesterday kept the cash rate on hold at 2.75 per cent.
But BK Asset management managing director Kathy Lien said the tone of the statement accompanying the RBA board's decision prompted investors to sell off the Australian dollar.
She said the RBA again indicated it had room to cut the cash rate further, if necessary, but also appeared to play down signs of improvement in the Australian and Chinese economies.
The key driver for the Australian dollar on Wednesday would be the release of official gross domestic product (GDP) figures for the March quarter at 11.30am AEST.
But, Ms Lien said, investor sentiment was so weak the currency could fall even if the GDP number is better than expected.
“I think investors are being swayed by the reservations of the RBA,'' she said. “So, even if we get a GDP number that is a little higher than expected I still think we could see the Aussie sell off.''
AAP's survey of 14 economists on Monday showed a median forecast for GDP to have grown by 0.8 per cent in the March quarter.
