The Australian dollar lost value against the U.S. dollar and the Japanese yen on Tuesday after the nation's central bank reduced interest rates more than expected, published
reports indicate.
The Aussie lost more than 1 percent of its value against the U.S. dollar and investors gravitated toward the Japanese yen after the Reserve Bank of Australia cut borrowing costs by 50 basis points, according to Reuters. The Aussie was driving toward its lowest value in three months against the monetary
unit of the Pacific Rim nation.
"I was expecting a 25 basis-point cut at this meeting," director Derek Mumford with currency risk management company Rochford Capital of Sydney told Bloomberg. "You'd be worried they're cutting 50 basis points at this time and how aggressive they're going to be down the line. I think the Aussie could test parity in the next three to six weeks."
The Aussie was pulled down by economic data indicating Australian home prices fell while manufacturing sank to its lowest rate since October of last year.
The New Zealand dollar lost value against all but one of its 16 most-traded counterpart monetary units, according to Bloomberg.
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