The currency rallied on news the Reserve Bank of Australia (RBA) will hold rates at 4.5%. The AUD was further buoyed after announcements of a trade surplus record for Australia. Predictions forecast the surplus at $1.8 billion for June but data released has pegged the surplus at an all-time high of $3.54 billion.
This rise is especially heartening given it was not purely a result of price hikes. The volume of exports for this period has also shown a marked increase. Investors believe such data will force the RBA to re-look at its earlier announcement to keep the benchmark rate unchanged at 4.5%. It is unlikely that interest rates will move over the next year but such data does affirm arguments that the next move will be up. Soft retail and building approvals data put a slight dampener on the growth of the Australian Dollar.
Australian retail trade rose by a meager 0.2 per cent for the June period while building approvals for June fell 3.3 per cent. But Nomura Australia chief economist Stephen Roberts reassured that: "The Australian dollar is quite elevated at the moment, so when you get anything that’s slightly soft on the data side, it probably takes a bit of steam out of the Australian dollar."
Exchange rates as of Monday August 9 2010 were:
AUD/ GBP: 0.5764
AUD/ EUR 0.6924
AUD/ USD: 0.9191
AUD/ JPY: 78.69
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