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Aussie Slows Rally After RBA, Gets Help from Housing Data

March 4, 2014 at 8:16 by Vladimir Vyun

Australian coins and banknotesThe Australian dollar was rising yesterday, but slowed its rally against the US dollar and the euro after Australia’s central bank left the cash rate at the record low and said that the exchange rate is still high. The Aussie continued to rise against the Japanese yen.

The Reserve Bank of Australia left its main interest rate at 2.5 percent. The RBA commented on the exchange rate:

The decline in the exchange rate seen to date will assist in achieving balanced growth in the economy, though the exchange rate remains high by historical standards.

Negative impact of such comment was limited as the central bank reiterated the opinion that borrowing costs are likely to remain stable.

Surprisingly enough, despite of the geopolitical tension and fears, the Aussie managed to rise against the yen. Perhaps, the currency got help from the housing data, which showed that building permits grew in January, outpacing analysts’ projections, after falling in the previous month.

AUD/USD rose a little 0.8952 as of 8:16 GMT today opening at after 0.8944. EUR/AUD traded at 1.5374, near the opening rate of 1.5366. AUD/JPY rose from 90.63 to 91.18.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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