Aussie Strengthens on Economic Growth

The Australian dollar reached today the highest level in almost three months versus its US counterpart and advanced against the Japanese yen as the signs of the robust economic growth supported the outlook for the unchanged interest rates and spurred the demand for the higher-yielding assets. The currency fell versus the euro.
The Australian retail sales in June, which will be reported tomorrow, estimated to rise by 0.4 percent after previous increase of 0.2 percent. The Chinese economy may also bolster Australia’s currency as China is Australia’s largest trading partner. China’s economic growth, while slower than in the first quarter, remains quite significant.
Katie Dean, the senior economist at Australia & New Zealand Banking Group Ltd., commented on this matter:

We feel pretty positive about the outlook in Asia, particularly in China. The Aussie and kiwi will be supported.

The good economic data should encourage the policy makers of the Reserve Bank of Australia to keep the interest rates at the current 4.5 percent level on the tomorrow’s meeting.
AUD/USD jumped to 0.9127 from 0.9060 as of 19:40 GMT today after reaching 0.9145. AUD/JPY rose from 78.29 to 78.92. following advance to 79.29. EUR/AUD traded near 1.4426 after dropping as low as 1.4305.

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