above Graph shows historical exchanges rate Australia Dollar vs Sri Lankan Rupee
Both Westpac and AMP Capital have scrapped forecasts of rate hikes next year and now predict two further cuts from the Reserve Bank, taking the cash rate to a new record low of two per cent. The Australian dollar fell to 83.56 US cents overnight, its lowest level since July 2010.
Better-than-expected retail and international trade figures on Thursday gave the Australian dollar a slight boost but the enthusiasm was short lived as rate cut talk weighed on the currency, BK Asset Management managing director Boris Schlossberg said.
“The sentiment towards the Australian dollar/US dollar has changed radically this week after a shockingly weak GDP reading,” Mr Schlossberg said.
“The market is now much more receptive to the prospect of a rate cut from the RBA should growth slow down further.
“With rate expectations now tilted towards easing the pair remains under heavy selling pressure.”