Australian dollar advanced against its US counterpart on Tuesday, following the decision by the Reserve Bank of Australia (RBA) to leave the benchmark interest rate without change at the current record low level.
AUD/USD reached a session high at 0.9047 at 5:13 GMT, after which consolidation followed at 0.9039, gaining 0.67% for the day. Support was likely to be found at August 5th low, 0.8846, while resistance was to be met at August 29th high, 0.8977.
The Australian Bureau of Statistics said in a report earlier on Tuesday that retail sales in the country rose by 0.1% during July on a monthly basis, following the flat value a month ago, while experts had anticipated the indicator will advance 0.4%. Weaker sales in universal stores contributed to the overall result, as they dropped at a rate similar to that in July 2012, when sales fell by 8.6%, after which they gained 6.4% in August. Food sales rose by 0.5% in July, following the 0.1% dip in June and May. Reported retail sales data came in consonance with expectations in the RBA minutes of its most recent meeting, which stated that the increase in sales during the upcoming months may be weak.
Also, the deficit on Australias current account widened to 9.350 billion AUD during the second quarter of the year, as the deficit figure in Q1 was 8.740 billion AUD, a revision down from 8.510 billion AUD previously. Preliminary estimates pointed a deficit of 8.500 billion AUD.
Additionally, the Reserve Bank of Australia (RBA) left its benchmark interest rate at the record low level of 2.50% at its meeting today in line with expectations. “The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target,” RBA Governor Glenn Stevens said in a statement accompanying the decision, cited by Bloomberg. Stevens also said that economic development was slightly below projections, while the national currency has depreciated 15% since the beginning of April 2013, but yet, it was still on higher levels against most of its major peers.
Meanwhile, yesterday the Bureau of Statistics in Australia said that building approvals rose by 10.8% in July, considerably outpacing preliminary estimates of a 4.0% increase, following the 6.3% drop in June, according to revised data. In annual terms, the indicator advanced 28.3% in July, after the 11.8% decline, registered a month ago.
At the same time, company operating profits in Australia shrank 0.8% during the second quarter of the year compared to the first, after rising by 3.5% in Q1, while expectations pointed a 0.9% increase.
Elsewhere, the Aussie was gaining against the euro as well, with EUR/AUD cross retreating 0.78% to trade at 1.4585 at 6:32 GMT. AUD/NZD pair rose 0.38% on a daily basis to trade at 1.1544 at 6:32 GMT.
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