Australian Dollar Jumps on RBA Board Optimism
THE TAKEAWAY: RBA Board Minutes Show Optimism for Economic Growth > Positive Outlook Downgrades Chance of Rate Cut > AUDUSD Jumps Higher
Monetary policy meeting minutes released by the Reserve Bank of Australia portray a Board markedly optimistic for Australia’s economic outlook. With regard to international conditions, governors noted improving activity in the United States, a “firm” Chinese market, “less likely” downside risk in Europe, and strong foreign demand for Aussie government debt. Domestically, board members emphasized low unemployment, a strong mining industry, contained inflation, and “ample scope” to cut interest rates. Yet, caution among consumers, persisting EU debt concerns, and general market risk aversion hinder further growth. The Board also decided that the country’s cash rate was at an appropriate level and not due for a change in the coming period.
Following the tremendously positive release, traders shifted their portfolios towards the AUD. The AUDUSD experienced a clear bid and rose from 1.0598 to 1.0615 in the minutes following.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.