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AUD Stops Growth after RBA Statement

May 6, 2008 at 9:47 by Andriy Moraru

Australian dollarThe Australian dollar stopped growing on the Forex market today after the Reserve Bank of Australia mentioned economical growth moderation in its monetary policy statement.

The RBA kept its 12-year high interest rates unchanged at 7.25 percent points today during the scheduled monetary policy meeting ruled by Glenn Stevens.

The Aussie has reached its 24-year record high level against the U.S. dollar recently and traded near that level before the monetary policy meeting. Reserve Bank of Australia Governor Glenn Stevens mentioned that the output growth may moderate this year, causing the currency drop from its high. The drop was limited due to the mention of the remaining inflation risks that leave possibilities for the further rate hikes:

In order to reduce inflation over time, growth in aggregate demand needs to be significantly slower than it was in 2007. Evidence is accumulating that this is occurring. Indicators of household spending have recorded subdued outcomes over recent months, and demand for credit by both households and businesses has weakened… Given the opposing forces at work, considerable uncertainty remains about the outlook for demand and inflation.

AUD/USD fell down today from 0.9465 to 0.9450, while AUD/JPY still fluctuates near its open rate — 99.23.

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