On Saturday, the Australian dollar advanced against its American counterpart in the Asian session. The catalyst for the Aussie's upward correction was the monetary policy decision of the Reserve Bank of Australia. The AUD/USD pair rebounded from Monday`s low and touched 0.7680. Later in the Asian trade, the Aussie retreated to 0.7664. The Reserve Bank of Australia decided to retain the cash rate at a record low of 1.50%. The board noted the prospects of achieving the inflation target. The board preferred to keep the status quo judging by the economic conditions of China, the main consumer of Australian commodities.
According to the official data, China's GDP slowed down the pace of growth in the December quarter on a quarterly basis. The economy expanded 1.7% in the fourth quarter from 1.8% growth in the previous quarter. Recently, the People's Bank of China took crucial measures to bolster soft economic growth and unexpectedly raised medium-term and short-term interest rates. Many traders are worried about gradual tightening by China's regulator, as higher interest rates mean higher costs of servicing short-term loans. Besides, China is facing headwinds from the external environment, including unclear trade relations between the US and China.