The Australian dollar is sharply higher today after a round of strong local data as well as comments by RBA governor Glen Stevens after the latest RBA interest rate decision.
At 8.20pm (GMT) the Aussie dollar was trading at US73.31c up sharply from US72.26c in yesterday’s trade.
As expected, the Reserve bank of Australia left interest rates on hold at 2 percent, but it was the following monetary speech, which had investors flocking to the Australian dollar.
Governor Stevens noted that although GDP was somewhat slow, some areas of the economy are doing well and seem to be making a transition from the mining boom,
“While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions in non-mining sectors over the past year. This has been accompanied by stronger growth in employment and a steady rate of unemployment.” Mr Stevens said
As has been the case in the previous few statements, he left open the door for an interest rate cut in the nearest future should local data such as the inflation figures, fall below expectations,
“Members observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand” he said
Another boost for the Australian dollar was the release earlier today of the AIG performance manufacturing Index released by the Australian industry group, which came in at 52.5 and up from 50.2 in the previous month. A number above 50 shows the market in growth mode
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