News Column

Australian Dollar Rises After RBA Minutes

August 18, 2014

CANBERA (Alliance News) - The Australian dollar strengthened against the other major currencies in the Asian session on Tuesday following the release of the minutes of the August monetary policy meeting.

At the meeting, the Reserve Bank of Australia, or RBA, decided to keep its key interest rate unchanged at 2.5%, a level at which the rate has been since August 2013.

Despite recent higher readings, inflation is expected to be in line with the target of 2-3% over the next two years, the Board said.

The Board assessed that the current monetary policy was appropriately configured and remained accommodative and supportive of demand.

Meanwhile, the results of a survey by ANZ Bank and Roy Morgan Research showed that their consumer confidence index for Australia rose to 112.5 in the week ended August 17, from the prior week's 108.5.

The Australian dollar rose to a 9-month high of 1.1066 against the NZ dollar, from an early low of 1.0989. If the aussie extends its uptrend, it is likely to find resistance around the 1.12 area.

Against the US dollar and the euro, the aussie rallied to nearly 2-week highs of 0.9337 and 1.4305, from early lows of 0.9315 and 1.4338, respectively. The aussie may test resistance near 0.94 against the greenback and 1.41 against the euro. Moving away from an early low of 95.60 against the yen, the aussie advanced to a 2-week high of 95.77. Continuation of the bullish trend may lead the aussie to a resistance around the 96.18 mark.

Against the Canadian dollar, the aussie appreciated to a 5-day high of 1.0169 from an early low of 1.0147. On the upside, 1.02 is seen as next resistance level for the aussie.

Looking ahead, final Japan leading economic indicator index for June is due at 1:00 am ET. In the European session, Eurozone current account data for June is due to be released.

In the New York session, US consumer prices index and building permits and housing starts-all for July are scheduled to be released.

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Source: Alliance News

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