While the US Dollar may have struck a 1-month high, it was the Aussie Dollar that was the session’s big winner, gaining nearly 1% on the latest Australian data. According to the Australian Bureau of Statistics, 4th quarter GDP growth (quarter-over-quarter) came in above consensus at 0.6% compared to 0.5% expected. Meanwhile the previous quarter’s reading was revised upward to 1.1%. That is an encouraging sign for the risk-on trade, suggesting that China’s slowdown hasn’t negatively impacted the Aussie economy to the extent originally thought. An slight improvement in commodity prices is also helping to shore up the Aussie Dollar.
As reported at 10:49 am (GMT) in London, the AUD/USD was trading at $0.7210, a gain of 0.40%. Earlier in the session, the pair was trading at a peak of $0.7246, while the session low was at $0.7167. The AUD/JPY was trading higher at 82.441 Yen, up 0.66%.
RBA Gets Breathing Room
The news gives some breathing space to the Reserve Bank of Australia when it considers its next policy decision. The RBA had just met yesterday and lefts its current monetary policy unchanged, with the interest rate at 2%. There had been some pressure for the RBA to ease further in order to stimulate the Aussie economy; this latest data allows the RBA to take a wait and see stance, at least for another month.