The Australian dollar rallied today as retail sales beat expectations in January and the Reserve Bank of Australia left interest rates unchanged. The currency gave away some of its initial gains and erased the rally versus the yen completely.
Australian retail sales rose 0.9 percent in January after falling 0.4 percent in the previous month. The analysts’ estimate was 0.4 percent growth.
The RBA left its key interest rate at 3 percent today. Central bank’s Governor Glenn Stevens was rather upbeat about the global economy, saying that “the downside risks appear to have lessened” and noting that situation stabilized in most regions of the world. He also mentioned the accommodative policy, saying that “there are signs that the easier conditions are having some of the expected effects”. Stevens was somewhat concerned that “the exchange rate remains higher than might have been expected” and concluded that “an accommodative stance of monetary policy is appropriate”.
AUD/USD rose from 1.0193 to 1.0251 before trading at 1.0222 as of 12:29 GMT today. EUR/AUD fell from 1.2772 to 1.2749, while its daily low was at 1.2717. AUD/JPY was flat at 95.27.
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