Australiaâs dollar started November off with gains against the US dollar as markets speculate that the Reverse Bank of Australia could be moving away from reducing its interest rates any time soon.
The nationâs central bank took a decision earlier today to maintain its interest rates without any changes at 1.50%, stating strong conditions in the labor market, improved commodity prices and the stable economic situation in China as the main reasons behind the decision.
The decision came as no surprise to traders but the following statement of Philip Lowe, the governor of the central bank, reflected willingness on his side to maintain inflation at the current level without introducing more stimulus for the Australian economy.
Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening. Inflation is expected to pick up gradually over the next two years.
The Australian dollar rose following the decision but it had limited gains against the US dollar amid increasing expectations that the US Federal Reserve will raise its interest rates in its meeting on December 14. Upcoming economic events in the USA, including non-farm payrolls, ISM manufacturing, and the result of the meeting of the Federal Open Market Committee could push the US dollar higher even as the Australian currency gets supported by the good performance of its economy.
AUD/USD traded at 0.7647 as of 20:40 GMT after touching todayâs high at 0.7687 by 15:15 GMT. The pair still maintained most of its gains after rising from todayâs low at 0.7599, which it recorded at 02:30 GMT.
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