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Aussie gains for fifth day after RBA holds rates
The Australian dollar strengthened for a fifth day as expectations of a rate cut this year were dampened after the Reserve Bank of Australia held its benchmark interest rate at 2 per cent.
The Australian dollar gained against all except one of its 16 major counterparts after the announcement and in reaction to the RBA statement that available information “suggests that moderate expansion in the economy continues” and “has been accompanied with somewhat stronger growth of employment.”
The currency also reached a two-week high after commodity prices and global equities rebounded.
Australia’s dollar gained 0.6 percent to 71.28 U.S. cents as of 6:45 a.m. in London, set for its biggest advance since September 16.
The RBA in its statement also said “the economy is likely to be operating with a degree of spare capacity for some time yet, with domestic inflationary pressures contained.” The Aussie is “adjusting to the significant declines in key commodity prices,” the central bank said.
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