Aussie Bounces After RBA Meeting

The Australian dollar was falling today due to mixed macroeconomic data but rebounded after the central bank’s policy meeting, even though monetary policy remained unchanged and the statement from the bank was not particularly hawkish.
The Reserve Bank of Australia left its main interest rate at 2.5 percent today. The central bank noted in the accompanying statement after the decision that economic data demonstrates “moderate growth in the economy” but it is expected for “growth to be a little below trend for the next several quarters.” Policy makers continued to complain that the exchange rate remains too high, hurting growth prospects. As for the future, the statement reiterated that “the most prudent course is likely to be a period of stability in interest rates.”
As for today’s reports from Australia, retail sales rose 1.2 percent on a seasonally adjusted basis in September, much more than was expected by specialists (0.3 percent). At the same time, the trade balance posted a deficit of A$2.26 billion last month, which exceeded market expectations of A$1.78 billion.
AUD/USD rose from 0.8679 to 0.8725 as of 4:54 GMT today following the drop to 0.8645 — the lowest rate since October 3. EUR/AUD rallied from 1.4378 to 1.4449 before turning down to 1.4349. AUD/JPY advanced from 98.97 to 99.05, bouncing from the decline to 98.30.

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