The Australian dollar gained today on speculations that the Australian central bank will pause interest rate cuts to gauge the impact of the accommodative monetary policy on the economy. Earlier, the currency was falling amid negative reports from China.
Analysts believe that the RBA will not cut interest rates on its next meeting. The central bank left the main rate unchanged during its last meeting and it is likely do so again. The fundamental data does not provide incentive for an interest rate cut as the Manufacturing Index of Australian Industry Group showed an increase by 5.4 point to 45.6 in February.
News from China was not so good. The manufacturing Purchasing Managers’ Index of the China Federation of Logistics & Purchasing dipped from 50.4 in January to 50.1 in February. The HSBC China Manufacturing PMI declined from 52.3 in January to 50.4 in February.
AUD/USD advanced from 1.0211 to 1.0232 and AUD/JPY went up from 94.51 to 94.81 as of 4:38 GMT today. EUR/AUD traded at 1.2775 after rising from 1.2778 to 1.2802.
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