Aussie Jumps to Six-Month Record as Stevens Surprises Traders
The Australian dollar climbed today, erasing yesterday's losses versus the US dollar and the Japanese yen and reaching the highest level in six months against the greenback, after the Reserve Bank of Australia surprised Forex traders by keeping its interest rates unchanged.
The Australian currency was falling yesterday as a report showed that retail sales fell 0.1 percent (on a seasonally adjusted basis) in December from November. Another reason for the drop was a deteriorating sentiment about the ability of Europe to deal with its crisis.
The RBA removed all negativity today by keeping its main interest rate at 4.25 percent, while most analysts were pretty sure that it would reduce the rate to 4 percent. Glenn Stevens, Bank's Governor, made another surprise, saying in his statement:
The acute financial pressures on banks in Europe were alleviated considerably late in 2011 by the actions of policymakers. Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made.
It's rather unusual to see these days such positive view on the situation in Europe. The comments about Australia's domestic fundamentals were less surprising, but no less positive for the Aussie as Stevens said that "information on the Australian economy continues to suggest growth close to trend".
AUD/USD climbed from 1.0720 to 1.0821, the highest level since August 2, and traded at 1.0802 as of 16:39 GMT today. AUD/JPY surged from 82.06 to 83.02 and touched 83.17, the highest price since November 1, intraday.