The Australian Dollar strengthened quickly. Overview for 05.12.2017

The AUD/USD pair is trading upwards on Tuesday morning; it is getting more expensive after the RBA meeting.

The Australian Dollar is rising against the USD. The current quote for the instrument is 0.7643.

The Aussie owes today’s growth to the statistics and the results of the latest RBA meeting. The Retail Sales improved by 0.5% m/m in October, which is better than both previous and expected readings. The components of the report show that the major improvement was made by sales by cafes, restaurants and takeaway food (from +0.3% in September to +1.7% in November), household goods (from -0.4% to +0.1%), and clothing, footwear and personal accessories (from -0.7% to +1.0%). On the other hand, food sales declined (from +0.6% to +0.3%), as well as department stores (from +2.1% to +0.3%).

The report on the country’s Current Account in the third quarter also was positive, but not as much as it could have been. The indicator is -9.1B against the previous reading of -9.7B. it’s not bad, although it was expected to be -8.8B.               

The Reserve Bank of Australia left the benchmark rate unchanged at 1.5% during its December meeting. In the comments, Phillip Lowe, the RBA Governor, stated that the Australian economy continued growing during the entire year of 2017 as the global financial situation improved. Another good thing is that there are signs of improvement in the Chinese economy as well. It is well known that China is the most important trade and economic partner of Australia and the Chinese statistics is very important. Among the latest improvements are the Composite PMI (from 51.0 points in October to 51.6 points in November) and the Services PMI (from 51.2 to 51.9), which is also good for Australia. Average expectations for the Australian GDP for the next three years remain at 3%. Of course, it’s an average number, but it’s quite okay as a target. The country’s economy will get support from increasing investments into the infrastructure and the employment market. Still, the Household Spending remains a weak spot. As long as there are no proper conditions for spending, the economic growth will be slow.

RoboForex Analytical Department