Australian Dollar Up On Corporate Profits, More Key Events Ahead
- AUD/USD gained after better-than-expected Australian company operating profits
- They rose 2.2% in Q4 2017, highest since Q2. Building approvals also topped bets
- RBA monetary policy expectations steady ahead of rate announcement, GDP data
The Australian Dollar gained against the US counterpart after better-than-expected corporate profits and building approvals readings. Company profits rose 2.2% q/q in the fourth quarter of 2017 comparted to a 0.2% drop in the third quarter. The data was also the highest rise since the second Quarter of 2017.
Meanwhile, Australian building approvals increased 12.0% y/y in January compared to a 5.0% decline in December. The rise was as opposed to a 0.5% contraction estimated.
The stronger outcomes might be a good sign for overall economic growth, which could have been the reason why the Aussie Dollar went up. However, local 2-year government bonds yields were steady after the positive readings. The markets seemed to be dubious of the data’s implication for monetary policy given the proximity of important events coming up.
First, the Reserve Bank of Australia rate decision is tomorrow. Then, GDP will be released the following day. We shall see if the RBA might say about the improved readings at their next monetary policy announcement, and what their view on the world is.
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