Australian Dollar Spikes Up As RBA Keeps Cash Rate On Hold
December 02 2019 - 8:27PM
RTTF2
The Australian dollar firmed against its key counterparts in the
Asian session on Tuesday, as the Reserve Bank of Australia held its
cash rate steady in its final meeting this year, saying that recent
rate cuts are supporting employment and income growth and
achievement of the inflation goal.
The board of the Reserve Bank of Australia, governed by Philip
Lowe, decided to leave the cash rate unchanged at a record 0.75
percent.
"Given these effects of lower interest rates and the long and
variable lags in the transmission of monetary policy, the Board
decided to hold the cash rate steady at this meeting," the bank
said in a statement.
The bank maintained that it was reasonable to expect that an
extended period of low interest rates will be required in Australia
to reach full employment and achieve the inflation target. The bank
said it is prepared to ease monetary policy further, if needed.
The bank observed that the lower cash rate has put downward
pressure on the exchange rate, which is supporting activity across
a range of industries.
Data from the Australian Bureau of Statistics showed that
Australia logged current account surplus for the second consecutive
quarter in the three months to September. The current account
surplus rose A$3.18 billion to A$7.85 billion in the September
quarter.
The currency outperformed against its most major counterparts on
Monday, as upbeat Chinese data helped ease investor concerns about
slowing global growth. It rose 0.9 percent against the greenback,
0.4 percent against the yen and 0.3 percent against the euro for
the day.
The aussie appreciated 0.4 percent to near a 3-week high of
0.6844 against the greenback, from a low of 0.6815 it recorded at
6:30 pm ET. The pair had finished Monday's deals at 0.6818. Should
the aussie extends its rally, 0.71 is likely seen as its next
resistance level.
After a brief decline to 74.27 against the yen at 6:30 pm ET,
the aussie turned higher, rising 0.6 percent to a 3-week high of
74.73. The aussie had finished yesterday's trading session at 74.30
against the yen. The currency is seen locating resistance around
the 78.00 mark.
The aussie advanced to 1.6185 against the euro, its biggest
since November 14, and marked a 0.4 percent gain from a low of
1.6253 seen at 5:30 pm ET. The euro-aussie pair was valued at
1.6247 at Monday's close. The aussie may face resistance around the
1.60 mark, if it appreciates again.
The aussie was 0.3 percent higher at 1.0510 against the kiwi,
following a decline to 1.0480 at 10:15 pm ET. At Monday's close,
the pair was worth 1.0485. Extension of the aussie's uptrend may
take it to a resistance around the 1.08 region.
The aussie gained 0.5 percent against the loonie, approaching
near a 4-week high of 0.9107. The rally came after a drop to 0.9064
at 5:00 pm ET. The pair was quoted at 0.9074 when it ended trading
on Monday. Next immediate resistance for the aussie is likely seen
around the 0.92 level.
Looking ahead, at 2:30 am ET, Swiss consumer inflation for
November is slated for release.
U.K. construction PMI for November and Eurozone PPI for October
are due out in the European session.
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