The Australian dollar strengthened today as retail sale beat analysts’ forecasts and trade balance deficit was smaller than expected. Still, most market participants believe that the Australian central bank will cut its interest rates tomorrow.
Australia’s retail sales grew 0.5 percent on a seasonally adjusted basis in September from August. The rate of growth was above the expectations of 0.4 percent and the August rate of 0.3 percent. The trade balance deficit narrowed from A$1.88 billion in August to A$1.46 billion in September (seasonally adjusted), while the median forecast was A$1.60 billion. Experts predict that the Reserve Bank of Australia will cut its main interest rate by 25 basis points to 3 percent tomorrow.
AUD/USD rose from 1.0337 to 1.0358 as of 13:53 GMT today. EUR/AUD declined from 1.2392 to 1.2344 and its daily low of 1.2331 was the lowest since September 27.
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