Forex - AUD/USD rallies after RBA minutes
Published Oct 14, 2013 10:34PM ET
In Asian trading Tuesday, AUD/USD jumped 0.40% to 0.9526. The pair was likely to find support at 0.9390, the low of October 10 and resistance at 0.9524, the high of September 19.
"Members noted that the Australian dollar was still around 10 percent below its peak in April," according to the RBA minutes. The central bank has been steadfast in its view that the Aussie is overvalued and that it would like to see the currency fall further to help Australian industry.
RBA left interest rates unchanged at 2.5% at its last meeting, but it has slashed rates by 225 basis points over the past two years and the door is still open to further rate cuts.
Traders see a 22 percent chance the RBA will reduce borrowing costs from a record-low 2.5 percent by the end of this year, compared with 37 percent odds a month earlier, according to Bloomberg interest rates swaps data.
"Members agreed that the Bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them," according to the minutes.
Market data indicate there is only an 11% chance RBA lowers rates at its November meeting and most traders now believe that if another rate cut is coming, it will happen in February 2014.
The Aussie rallied a day after official data showed that home loans in Australia fell 3.9% in August, exceeding expectations for a 2.5% decline, after a downwardly revised 2.1% rise the previous month.
Elsewhere, AUD/JPY rose 0.23% to 93.77 while AUD/NZD added 0.18% to 1.1376.
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Written By: Investing.com
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