The Australian dollar jumped today as domestic fundamentals and the Reserve Bank of Australia policy decision propelled the currency higher, allowing it to overcome the negative impact of risk aversion, created by the US government shutdown.
Australian retail sales rose 0.4 percent in August from July on a seasonally adjusted basis, beating the median forecast of 0.3 percent. The seasonally adjusted Australian Industry Group Australian Performance of Manufacturing Index jumped by 5.3 points to 51.7 in September. It was the first month since June 2011 that the gauge has advanced above 50, indicating an expansion. The RBA left its main interest rate at 2.5 percent at today’s meeting and made no mention of rate cuts in the future.
As was expected, US politicians were unable to reach a compromise on the budget. Federal services are in process of shutting down. It is hard to tell how long the shutdown will hold, but it is likely to hurt the trades’ mood greatly.
AUD/USD jumped from 0.9314 to 0.9389 and AUD/JPY surged from 91.50 to 92.14 as of 5:01 GMT today. EUR/AUD dropped from 1.4513 to 1.4428.
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