The Australian dollar rallied today, rising for the second consecutive trading session. The currency advanced as the central bank left interest rates unchanged while macroeconomic indicators exceeded economists’ expectations.
The RBA kept the main cash rate unchanged at 2.5 percent at today’s policy meeting. The central bank said in the statement that “growth in the global economy is continuing at a moderate pace” and in Australia “most data are consistent with moderate growth in the economy.” As for the currency’s strength, the RBA stated:
The exchange rate has traded at lower levels recently, in large part reflecting the strengthening US dollar. But the Australian dollar remains above most estimates of its fundamental value, particularly given the significant declines in key commodity prices in recent months. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.
The bank reiterated:
On present indications, the most prudent course is likely to be a period of stability in interest rates.
Building approvals and the current account came out better than experts have anticipated.
AUD/USD rose from 0.8490 to 0.8520, and AUD/JPY advanced from 100.52 to 100.88 as of 6:09 GMT today. EUR/AUD dropped 1.4680 to 1.4629.
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