The Australian dollar was soft today even as domestic fundamentals were supportive to the currency. The likely reason for the currency’s weakness was bad news from China. Currently, the Aussie has trimmed its losses versus most majors.
The Reserve Bank of Australia kept is main interest rate unchanged at 1.5% today, as was widely expected. Traders watched the accompanying statement closely, fearing it to be dovish. Yet it turned out to be mostly unchanged compared to the previous one, even a bit more optimistic.
The Australian Bureau of Statistics reported that the current account deficit shrank to A$7.2 billion in the December quarter on a seasonally adjusted basis from A$10.8 billion the September quarter. Analysts had predicted a bigger deficit of A$9.3 billion.
The Australian Industry Group Australian Performance of Services Index rose slightly from 44.3 in January to 44.5 in February. It was still below the neutral level of 50.0, indicating the second consecutive monthly decline of the sector, which followed the period of growth that had lasted since 2017.
AUD/USD was down from 0.7091 to 0.7080 as of 14:40 GMT today, while its daily low was at 0.7065.EUR/AUD traded at 1.5999 after opening at 1.5989 and rising to the daily maximum of 1.6037. AUD/CHF was little changed at 0.7086 after falling to the daily low of 0.7061 earlier.
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Australian Dollar Soft Despite Positive Domestic Fundamentals
