The ‘Aussie’ Dollar climbed to its highest level since September after the Reserve Bank of Australia unexpectedly kept its benchmark interest rate unchanged at 3.25%.
The currency strengthened against all 16 of its major peers after the RBA opted to hold the rate at a developed-world high.
“The RBA was expected to potentially cut rates today and they didn’t,” said Greg Gibbs, a senior currency strategist at Royal Bank of Scotland Group Plc. “As a result the Aussie dollar rallied. Bond yields have risen.”
The Australian Dollar peaked at $1.0435, its strongest level since September 28th, a level 0.6% higher than its close level on Monday. Several economists had been predicting that bank would slash the rate by as much as 3%. The banks governor Glenn Stevens explained the reason for maintaining the relatively high rate.
“At today’s meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” Stevens said in a statement.
The Australian economy received a slight boost after data showed that house prices in the country rose in the third-quarter and saw its first back-to-back increase since 2010.
Traders in the Australian currency should be aware that the ‘Aussie’ remains vulnerable to international threats. This week it is particularly vulnerable to the outcome of the US Presidential elections and the continuing uncertainty in the Eurozone.
Appetite for riskier commodities has declined as the world waits to see which man out of Republican Mitt Romney and Democrat Barrack Obama will win the White House. In Greece, Prime Minister Antonis Samaras is facing down a revolt in his coalition government as he tries to force through a new round of austerity measures.
The Pound to Euro exchange rate is currently trading at 1.2486
The Pound to US Dollar exchange rate is currently trading at 1.5975
The Pound to Australian Dollar exchange rate is currently trading at 1.5312
The Pound to New Zealand Dollar exchange rate is currently trading at 1.9319
The Pound to Canadian Dollar exchange rate is currently trading at 1.5883
The Pound to Emirati Dirham exchange rate is currently trading at 5.8661
The Pound to Swiss Franc is currently trading at 1.5076
The Pound to Japanese Yen exchange rate is currently trading at 128.2000
The Euro to US Dollar exchange rate is currently trading at 1.2793
The Euro to Pound exchange rate is currently trading at 0.8005
The Euro to Australian Dollar exchange rate is currently trading at 1.2259
The Euro to New Zealand Dollar exchange rate is currently trading at 1.5469
The Euro to Canadian Dollar exchange rate is currently trading at 1.2750
The US Dollar to Pound exchange rate is currently trading at 0.6255
The US Dollar to Euro exchange rate is currently trading at 0.7822
The US Dollar to Canadian Dollar exchange rate is currently trading at 0.9956
The US Dollar to Australian Dollar exchange rate is currently trading at 0.9590
The US Dollar to New Zealand Dollar exchange rate is currently trading at 1.2096
The US Dollar to Japanese Yen exchange rate is currently trading at 80.0500
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