The Australian Dollar regained some ground against the Pound, the Euro and US Dollar on Monday as investors focused their attention on Tuesday’s Reserve Bank of Australia policy meeting.
The RBA is expected to maintain the nation’s interest rate at 2.50%. The market is so confident that no change will occur that it has taken 96% odds that the Bank will choose to hold. Speculation is also high that tomorrow could mark the beginning of the end for the nations interest rate cut cycle which over the past two years has seen the RBA cut rates eight times.
“We think the RBA has finished cutting rates. We do, however expect the easing bias to remain for now,” said an economist at RBC Capital Markets. The easing bias is a reference to the RBA’s policy of trying to talk down the currency in order to bolster exports and the nation’s tourist industry in the wake of the fading mining boom.
The ‘Aussie’ could see something of an upturn over recent weeks as the RBA is expected to ease away from its stance of low interest rates after recent data showed a pickup in consumer spending and business conditions.
Also supporting the ‘Aussie’ was the release of data out of China, Australia’s biggest trading partner. Over the weekend a report was released which showed that the world’s second largest economy’s manufacturing purchasing managers index came in at 50.5 in January. The figure was down from the previous months of 51.0. Although the reading was a five-month low it was stronger than revised data last week showing that China’s HSBC manufacturing index ticked down to a six-month low of 49.5 this month.
Current Australian Dollar Exchange (AUD) Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8782 ,
Australian Dollar,,British Pound,0.5368 ,
Australian Dollar,,Euro,0.6508 ,
Australian Dollar,,New Zealand Dollar,1.0829 ,
[/table]
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