The Australian dollar advanced today, rising for the second trading session, after the release of central bank’s policy minutes. The currency managed to bounce to Friday’s closing level against the US dollar and the euro after opening sharply lower on Monday but struggled to rise against the Japanese yen.
The minutes revealed a mixed picture of Australia’s economic performance, saying that “exports had declined” and “labour market conditions had remained subdued” but mentioning at the same time that “business conditions had improved”. Central bank’s members are still unhappy with the exchange rate, saying:
The exchange rate remained above most estimates of its fundamental value, particularly given the declines in key commodity prices and, overall, had offered less assistance to date than would normally be expected in achieving balanced growth in the economy.
While the Aussie edged higher after the minutes, they provided no real reason for the currency to rally. Therefore, it is not surprising to see that the Australian dollar is currently struggling to hold onto gains. With weak economic indicators in China and prospects for monetary tightening from the Federal Reserve, the Aussie will have hard time holding its ground.
AUD/USD 0.9028 to 0.9035 as of 4:05 GMT today, reaching the high of 0.9054 intraday. EUR/AUD ticked down from 1.4331 to 1.4329, while its daily low was at 1.4309. AUD/JPY close at about the opening level of 96.76.
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