Aussie Pares Losses as RBA Raises Growth Forecast
The Australian dollar was falling, but snapped its losses versus its US peer and closed near the record high against the euro. The currency ended with a loss against the Japanese yen. The main bullish driver for the Aussie was Reserve Bank of Australia’s monetary statement.
The RBA revised its growth forecast for 2012 to 3.75 percent, up from 3 percent in May prediction. The central bank named several risks for Australia’s economic growth, but the slowdown of the nation’s major trading partner was one of the most important ones:
A key risk for Australia is the rate of growth in China, which currently appears to have stabilised, but could be higher or lower than expected given the challenges the authorities face in keeping growth at a more sustainable rate in a rapidly changing economy.
The strength of the Australian currency is also a risk:
In the domestic economy, important risks revolve around exchange rate developments. The exchange rate has been high for some time; indeed, this is a key part of the significant structural adjustment process that the economy is going through. However, it is possible that the persistently high level of the exchange rate may be more contractionary for the economy than historical relationships suggest.
Still, the statement was more hawkish than economists expected and gave boost for the Aussie.
AUD/USD closed flat at 1.0575, while intraday it fell to 1.0496. EUR/AUD declined from 1.6330 to 1.6150, closing near the all-time low. AUD/JPY fell from 83.08 to the daily minimum of 82.22 and closed at 82.76.
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Earlier News About the Australian Dollar:
- AUD/NZD Jumps as Australian Employment Improves (2012-08-09)
- Aussie Gains on Increasing Home Loans (2012-08-08)
- Australian Dollar Rallies After RBA Keeps Policy Unchanged (2012-08-07)
- Aussie Near Four-Month High vs. Greenback (2012-08-06)
- Traders Forgets Pessimism, Aussie Closes Higher (2012-08-04)