The Australian dollar fell today after the Reserve Bank of Australia indicated in its policy statement that an interest rate cut is likely in the future. The currency rose a little against the Japanese yen as other news from Australia was positive for the most part.
The RBA kept its main interest rate stable at 3 percent. Overall, the accompanying statement was mildly optimistic, saying that for global growth “the downside risks appear to have abated” and in Australia “growth was close to trend in 2012”. Yet the statement also suggested that even more accommodative policy is possible:
The Board’s view is that with inflation likely to be consistent with the target, and with growth likely to be a little below trend over the coming year, an accommodative stance of monetary policy is appropriate.
The deficit of the Australian trade balance narrowed to A$0.43 billion in December from A$2.79 billion in November. House prices rose as much as 1.6 percent in the fourth quarter of 2012 from the previous quarter, when they fell 0.1 percent.
AUD/USD fell from 1.0436 to 1.0400, following the rally to 1.0456, and EUR/AUD ticked up from 1.2944 to 1.3007, after falling to 1.2898, as of 10:29 GMT today. AUD/JPY was up from 96.40 to 96.61, while it declined to 95.93 earlier.
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