The Australian dollar advanced today after the Reserve Bank of Australia left interest rates unchanged and did not mention potential interest cut in its statement.
The RBA left its key interest rate at 2.5 percent at today’s meeting. The central bank said:
Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year.
The statement was not particularly optimistic about the domestic economy, but said nothing about interest rate cuts in conclusion:
The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.
This allowed the Aussie to rally even though fundamental reports were not supportive at all. Retail sales increased only marginally in July and the current account deficit unexpectedly widened last quarter.
AUD/USD jumped from 0.8974 to 0.9032 and AUD/JPY climbed from 89.15 to 89.91 as of 5:50 GMT today. EUR/AUD dropped from 1.4691 to 1.4585.
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