Australian dollar goes down on S&P outlook cut
On Thursday, the Australian dollar slumped after Standard and Poor’s decreased the outlook for Australia’s credit rating to negative. Meanwhile, the safe-haven Japanese yen dared to strengthen in the fallout from the UK’s vote the previous month to leave the European Union.
The Australian dollar dipped as low as $0.7467, from the previous trading session peak of $0.7539, after S&P diminished the outlook on the country’s AAA credit rating from stable to negative. However, the Australian dollar pared its losses to last buy $0.7507, which is down 0.1% on the day.
Additionally, the ratings agency had drawn attention to the fact that deadlock on government policy after Saturday's indefinite elections could endanger the country’s rating over the long run.
A Reuters survey taken ahead of S&P's move displayed that financial experts had raised their outlooks for the Australian as well as New Zealand dollars because of those countries' relatively high bond rates, not to mention the sterling’s recent slump.