RBA Holds Key Rate at 2.75%, Major Currencies Mostly in Sideways | IFCM
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RBA Holds Key Rate at 2.75%, Major Currencies Mostly in Sideways - 2.7.2013

The Reserve Bank of Australia decided to maintain its key rate unchanged at 2.75% as it was widely anticipated. Governor, Glenn Stevens, said that “financial conditions remain very accommodative”, “Inflation has been consistent with medium-term target” and “Australian dollar depreciated…although it remains at a high level”. Therefore, RBA members expect the Aussie to continue lower for further support of the economy and provide solution to rising concerns about growth limitations coming from slowing Chinese economy and declining commodity prices. The AUDUSD was limited by cap at 0.9250 and turned into negative bias, currently trading at 0.9168.


Elsewhere, the greenback continues in mostly sideways against the Japanese Yen as the volume is getting thinner ahead of the 4th of July holiday and NFP on Friday. The currency pair has been underpinned by risk aversion moderation as recent positive Japanese data lifted NIKKEI 225 which advanced today by 1.78% to close above 14,000. In addition, stronger Manufacturing PMIs in Europe and in US lifted risk sentiment with S&P 500 rising by 0.54% and DAX30 by 0.31%. Thus, should we see a continuation of relatively improving economic data, the USDJPY could breach key resistance at 100 and would shift focus to a more than 4 ½ year high at 99.85. The Euro was in sideways versus the US dollar in the last session around 1.3060, that neutral bias is likely to keep on until ECB statement on Thursday or NFP report on Friday. No major economic announces are expected today.
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