Australian dollar falls below 71 US cents

Related Story: RBA leaves rates on hold despite growth and inflation continuing to miss targets

The Australian dollar has fallen sharply since the Reserve Bank’s decision on Tuesday to keep interest rates on hold.

Market snapshot at 8:15am (AEDT):ASX SPI futures +0.5pc at 6,263, ASX 200 (Tuesday’s close) +0.4pc at 6,242AUD: 70.7 US cents, 53.82 British pence, 63.1 euro cents, 78.68 Japanese yen, $NZ1.05US: Dow Jones -0.3pc at 26,179, S&P 500 flat at 2,867, Nasdaq +0.25pc at 7,849Europe: FTSE 100 +1pc at 7,391, DAX +0.6pc at 11,755, CAC +0.3pc at 5,423, Euro Stoxx 50 +0.3pc at 3,396Commodities: Brent crude +0.6pc at $US69.44/barrel, spot gold +0.4pc at $US1,292.75/ounce, iron ore +1.4pc at $US89.89/tonne

It was buying 70.69 US cents at 7:15am (AEDT), a significant drop from yesterday’s 71.11 US cents.

The dollar also experienced steep falls to 53.83 British pence (-0.6 pc), 63.09 euro cents (-0.5 pc), and 78.72 Japanese yen (-0.6pc).

Currency traders sold the Australian dollar after noticing a “dovish” change in language in the RBA governor Philip Lowe’s post-meeting statement.

In particular, analysts noticed Dr Lowe did not mention the Australian economy growing at 3 per cent this year — a subtle omission compared to his previous statements — and spoke of a divergence between labour market and GDP outcomes.

“The [Reserve] Bank has acknowledged for the first time that the housing downturn is weighing on consumption and we also got a re-write of the final paragraph [of the statement] for the first time in ages,” NAB foreign exchange strategist Rodrigo Catril said.

He noted an important change in the final paragraph of the RBA governor’s post-meeting statement:

“The board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and

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