The Australian dollar climbed today even though the central bank cut interest rates. The statement was less dovish than usual, allowing the currency to bounce, while positive economic data added to the strength of the Aussie.
The Reserve Bank of Australia cut its main interest rate by 25 basis points to 2.5 percent as was widely expected. Yet the Aussie rose as the bank dropped the wording “the inflation outlook could provide some scope to ease policy further” and said instead:
The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.
Another positive event was the increase of the House Price Index by 2.4 percent in the second quarter of 2013, which exceed the median forecast of 1.3 percent. It was the fastest growth since the first quarter of 2010. Moreover, growth in Q1 2013 was revised from 0.1 percent to 0.8 percent.
AUD/USD rose from 0.8927 to 0.8958 as of 12:02 GMT today and its daily high was at 0.9004. EUR/AUD went down from 1.4846 to 1.4736 before trading at 1.4807. AUD/JPY ticked up from 87.73 to 87.90.
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