Aussie Moves Higher After RBA Maintains Policy, Makes Hawkish Remarks

The Australian dollar rose against its most-traded counterparts today following yesterday’s drop after the Reserve Bank of Australia decided to leave its monetary policy unchanged.

The RBA kept the key interest rate unchanged at 1.5%. Such decision was widely anticipated by analysts.

The central bank was surprisingly optimistic in its statement about the global economy and the economy of Australia’s main trading partner, China, in particular:

In China, growth was stronger over the second half of 2016, supported by higher spending on infrastructure and property construction.

The bank further said:

The improvement in the global economy has contributed to higher commodity prices, which are providing a boost to Australia’s national income.

The RBA was less positive about the domestic economic situation, stating that conditions varied in different parts of the country.

The yesterday’s drop of the Aussie could be explained by disappointing retail sales data. The report showed a drop by 0.1% in December from the preceding month whereas experts had promised an increase by about 0.3%.

AUD/USD rose from 0.7658 to 0.7670 as of 5:06 GMT, bouncing from the session low of 0.7633. EUR/AUD declined from 1.4030 to 1.3959, trading near the lowest level since May 2015. AUD/JPY advanced from 85.56 to 85.83 after touching the daily low of 85.23.

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