The Australian dollar advanced today, rising for the fifth straight trading session versus its US counterpart, as the nation’s central bank maintained status-quo, changing neither the current monetary policy nor the outlook for interest rates. Manufacturing data from China added to positive factors for the Aussie.
The Reserve Bank of Australia left its main interest rate at 2.5 percent at today’s meeting, and such decision was widely expected by market participants. The central bank said about the state of the Australian economy:
Recent data indicate somewhat firmer growth around the turn of the year, but this resulted mainly from very strong increases in resource exports as new capacity came on stream; smaller increases in such exports are likely in coming quarters.
The RBA remained unhappy with the Aussie’s exchange rate:
The exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy.
All in all, the central bank did not change its stance and reiterated:
On present indications, the most prudent course is likely to be a period of stability in interest rates.
Both official and private reports showed that China’s manufacturing sector was expanding last month. It is a good sign for Australia’s economy, which strongly depends on exports to the Asian nation.
AUD/USD rose from 0.9430 to 0.9443, and AUD/JPY climbed from 95.56 to 95.93 as of 10:41 GMT today. EUR/AUD declined from 1.4513 to 1.4491.
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