The Australian dollar was trading broadly soft today after the nation’s central bank left its monetary policy unchanged. The market sentiment that was negative to riskier currencies also played its part in the Aussie’s decline.
The Reserve Bank of Australia decided to keep its main interest rate at 1.5% as the vast majority of analysts were expecting. The central bank kept the statement almost unchanged, though voiced concern about the state of the housing market. Additionally, the RBA reiterated the warning about dangers of the currency’s appreciation:
The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.
Australia’s trade balance logged a surplus of A$3.57 billion in February (in seasonally adjusted terms), which was bigger than January’s A$1.50 billion and the analysts’ average estimate of A$1.75 billion. Yet that did not help the Aussie much.
AUD/USD dropped from 0.7602 to 0.7558 as of 10:39 GMT today. EUR/AUD advanced from 1.4025 to 1.4086. AUD/JPY fell from 84.32 to 83.49, trading near the lowest level since November 28.
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