Oil Drags On Asian Currencies, Aussie Down On Rate Cut

Muhammad Rameez Published August 02, 2016 | 11:19 AM

TOKYO,(APP - UrduPoint / Pakistan Point News - 2nd Augst,2016) - Asian currencies slumped Tuesday as an overnight selloff in oil hit sentiment, while the Australian Dollar dropped after the central bank slashed interest rates to a record low. Lingering worries about a supply glut drove crude to below $40 a barrel in New York, a three-month low, dragging down oil-linked currencies like the Malaysian ringgit. The Aussie dropped after the central bank cut its cash rate to 1.5 percent, a widely expected move to help the economy as it transitions away from a decade-long mining boom.

In Japan, the Yen dipped against the dollar as investors waited for the government to spell out details of its 28-trillion yen ($273 billion) plan to boost sluggish growth.

The Ringgit weakened 0.5 percent against the dollar, while other emerging market units, including the South Korean won, Indonesia's rupiah and the Philippine peso, were also down against the greenback. The Aussie fell as low as 74.91 US cents, from around 75.40 cents just before the rate decision. "The Reserve Bank have effectively thrown caution to the wind, respecting their mandate for price stability, amid diminishing negative effects from lower interest rates," said Chris Weston, an analyst for IG in Melbourne.