The Australian dollar advanced today after the Reserve Bank of Australia refrained from action and reiterated that monetary policy will likely remain the same for a prolonged period of time.
As was expected, the RBA left its main interest rate at 2.5 percent at today’s policy meeting. The central bank maintained the same outlook for monetary policy as before:
On present indications, the most prudent course is likely to be a period of stability in interest rates.
The bank again voiced the concern about the strength of the currency:
The exchange rate remains high by historical standards, particularly given the further decline in commodity prices.
As for other news from Australia, the current account deficit shrank while retail sales grew. All in all, domestic fundamentals were very supportive for the Australian currency, making its rally an expected event.
AUD/USD advanced from 0.9244 to 0.9278, and AUD/JPY rallied from 94.64 to 94.99 as of 8:54 GMT today. EUR/AUD dropped from 1.4704 to 1.4651.
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